Mistakes We made with money
We grew up without any money.
Perpetually in debt. Hand-to-mouth existence,
Which is why I grew up hating money.
I thought it was the cause of all our problems.
And I never wanted money to rule over me.
What I didn't realize though was that this
desire to dismiss money led me to disrespect it,
Because I had a knack for making money, I
never really spent any effort in understanding
how to manage and grow it.
In the process, I ended up making a lot of
mistakes.
Mistake 1
I took loans to buy real estate.
Assuming the price appreciation would take
care of the interest rate | pay.
I didn't take into account taxes.
I didn't take into account inflation.
didn't do the maths, that to get
a
respectable return, the price will have to grow
approximately twenty percent year-on-year.
Mistake 2
Whenever I made any extra cash, instead of
paying off the loan, I invested it in startups.
Convinced that the startup would multiply my
money several times over.
I basically went to a casino convinced I would
make enough money to repay my loans.
That's what I did!
Mistake 3
I invested in illiquid assets - startups, real
estate.
And rarely in liquid assets - stocks, gold.
So, when tough times happened, I had a lot of
paper wealth' but no cash.
Which meant collecting even more debt.
Never trying to pay it back.
Because hey, the previous example - of not
paying off loans with extra cash!
Mistake 4
For an entire decade, I took lower-than-market
salary, over-indexing on equity.
believed the equity would make me much
more than the salary ever would.
So when things didn't end up as expected, I
was left with no wealth.
Mistake 5
over indexed on the future.
Continued to maintain my lifestyle when I
should have lowered it.
Maxed my credit cards.
Accumulated more debt.
All in the hope that one mega event in the
future would resolve all issues.
Mistake 6
I invested in stocks when the markets went
high, in the hope of making fast money.
I sold in panic when the market tanked, so
that I didn't lose money.
It should have been the exact opposite.
Mistake 7
Whenever I was in need of money, I broke my
mutual fund investment to generate cash.
I basically broke compounding.
I persisted with it during the painful slow-
growth period.
And just when compounded growth was about
to take off, I clipped its wings.
Mistake 8
I discouraged my wife from investing in
mutual funds and buying gold.
She still did.
I mocked her and laughed at her.
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