Saturday, 25 March 2017
Money is an interesting subject. Whether you like this subject or you hate it, you will inevitably be affected by it. What makes the subject of money interesting is the wide variety of views people have on it. Many of these views are not just amusing but also outright silly.
Consider this view for instance: many people like to lock-in their money or go for an auto-debit facility because they think they lack discipline. Since you can’t access the money that has been locked in, you become “disciplined.” Since money will be auto-debited from your bank account periodically, you won’t be able to squander it.
The problem with the above-mentioned line of thinking is that in both the cases, you compromise on an important element of the investment process: control. In your urge to become disciplined, you actually lose access to your own money or allow others to take money out of your bank account. What sense does it make?
Investing is best done when you have control on the flows. You decide when you should invest. You decide when you should sell your investment. Of course, this requires a certain degree of sophistication, and you must develop that as an investor. If you don’t, you only let others—investment companies, the government, the bank, etc.—assume the control. They may not have your best interest in mind.
There are absolutely no short cuts to the success in investing. You must follow its principles to get successful. Being disciplined is an important principle. But being disciplined about wrong things won’t do you any good in the long term.