Lessons from the week (15 Oct 2023)
Retiring at 48 with 10 crores, standing out from competition, and rules to say No
What retiring at 48 with 10 crores looks like
Why 10 crores? You need about 25X of your annual expenses to retire. So that is a simple math to find out how much you need.
What are you doing with the money? You are buying time. But if you don't know what to do with the time, then why do you want to leave? Then continue doing what you are doing. It is only advisable to retire when you know what to do with your time. Not all 24 hours but with the 6 hours of the active 12 hours in a day.
50 - 60 are your best years - I retired in 2018 when I was 48 with a corpus of 10 crores. If you look at the age 50 - 60, it is either the best phase professionally or personally. Even if you retire at 60, you may live till 90, so you still have a 30 year journey. Those 30 years will be based on how you are:
- physically fit
- mentally fit
- fiscally fit
What is taking up your time?
3 hours go into sprint training. I want to sprint for India.
3 hours I play golf to balance the demands of sprinting.
3 hours I study geopolitics and its economic impact to India.
Interesting Fact - Almost all the mutual funds have returned a CAGR of 18% - 20% over the past 25 year period since when mutual funds started in India. That means if you had invested 1 crore and been patient, it would be worth 200 crores today. But you've barely had investors who have been part of the 25 year journey. The fact sheets have delivered but the investors have not seen the money.
I have come to the conclusion that:
- real estate is for living. That is the home I live in.
- gold is an ornament
- insurance is for protection
- mutual funds is for wealth creation, provided you have the patience to stay the course. 70% are in equity in the form of a PMS. 30% are in guilt funds.
How do you withdraw? For the primary source of income I use a Systematic Withdrawal Plan (SWP) or if needed I go and redeem when needed. I also make income through consulting.
What's the point of living poor and dying rich? Sometimes I feel like spending your own money is considered a big taboo. You earn this money primarily to save and spend. I built an interest in watches. Each watch has a story behind why I bought it.
*How did he RETIRE with 10Cr+?
What were your main selling points that allowed you to win against the big guys?
In a world of AI, the only advantage that you have is your uniqueness. You are a unique blend of characteristics and experiences which you can hone to stand out. No matter how much Chat GPT is used, the need for one-on-one human connection cannot be automated. We are tribal animals, emotional being, who will normally choose to work with those who add a layer of relationships to whatever we serve. Rich Paul negotiated $900 million worth of contracts last year. What is his secret? The below response is revealing.
There was a genuineness that could be felt. There is care for them as individuals and families. I wasn't selling anything because I found out early there was nothing to sell. The big guys would show a ppt and all the people they represented to show that they were like family. But the fact was that they didn't really care. I just shined a light on that.
The people that gave me an opportunity, I did right by them, which gave me the next opportunity.
*The Power Broker and Superstar Agent Behind LeBron James, Draymond Green, and Others
Have Rules so that you can make better decisions and say NO easily
In my experience fundraising for my business, I have noticed that a majority of people have a hard time saying No. Saying No does not come easy to most, probably because they don't want to hurt the other persons feelings or they perceive the negative response as a rejection that may not be taken well. So what they end up doing is going silent. This is also called ghosting. I believe a better way of saying no would be to say "I have a rule that (fill in the blank)." For example:
I have a rule that - I don't invest in businesses that are not doing at least 20 lacs a month.
I have a rule that - I take three months to evaluate a business.
I have a rule that .......
Here is how you can say NO without offending
People don't argue with rules because all our lives we have been taught to follow rules. Here are some of the rules that Tim Ferriss and Shane Parrish talked about:
I don't say Yes in the first meeting or on the phone.
There are only four outcomes: win-win, win-lose, lose-win, lose-lose. Out of the four only one works. And all the rewards of compounding come at the end. So you want a partner who is willing to wait with you. If you are rushing me for a decision it's a no.
I am a high trust person. If I feel the need for a contract, it's an easy no for me. That doesn't mean we don't have contracts.
Tim: How do you make better decisions?
Shane:
What position are you in when you make the decision? Warren Buffett is always in a position to advantage of an opportunity.
How is your temperament? You don't want to be hungry, angry, lonely, tired.
Outcome over ego - are you focused on getting the best outcome or are you focused on proving yourself right?
Are you thinking independently of the circumstances or are the circumstances thinking for you? Are you thinking independently of the crowd or is the crowd thinking for you? If the circumstances or the crowd is thinking for you, you aren't thinking at all.
Divide the problem definition from the solution. And do it in different days.
I really liked this because most people start thinking about the solution before even defining the problem properly. By dividing the process into different days, you can ensure that all your focus is first on defining what the problem is. If you define the problem well, the solution and results should flow.
*Rules for Better Thinking, How to Reduce Blind Spots, & More | Shane Parrish | The Tim Ferriss Show
Harsh Batra
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