It’s not everyday you get to meet your favorite author.
The Joys of Compounding teaches so much more than investing. It is a life manual.
It inspired me to start my blog and share everything I’ve learned about investing and life.
Here are 10 key lessons from Gautam masterpiece:
A quick intro…
Baid left his job as a banker in India to pursue investing in the U.S.
Baid worked the graveyard shift as a hotel clerk before breaking into the investment industry.
Today, he is a best-selling author in 5 countries and founded Stellar Wealth Partners.
1. Achieving a state of flow
Self-improvement is the best investment anyone can make.
In a world where social media, emails and instant messaging feeds off our dopamine…
A state of flow is essential.
Because there’s a heavy price to pay for wasting time in the long run.
2. Knowing when it’s enough
The whole pursuit of compounding your wealth is to be free.
But if you constantly shift your goal post and allow your lifestyle to inflate…
Pursuing wealth will make you a prisoner.
Fight against that urge to step on the hedonic treadmill.
3. Pursue your passion
Life is short. Time is fleeting.
It is a waste to not your North Star guide you.
And it is a tragedy if we live life based on what society expects of us.
Choose what makes you happy.
4. Building trust
Munger often cites reliability as one of the most essential traits for success.
80% of success in life is just showing up.
Always reliably show up for the task entrusted to you.
Underpromise and overdeliver.
Trust is earned when actions meet words.
5. In investing, simple is often the best
You are not paid for style points or complexity.
Our goal is to compound our capital over time at the highest possible rate with the minimum amount of risk.
6. The inner scorecard
The only scorecard that matters is your inner scorecard.
Don’t live a life based on approval from others.
Let your life be guided by internal principles, not external validation.
7. Long term investing isn’t just buy and hold.
It is buy and continuously verifying your thesis.
8. To be better is to take small steps
Humans have a tendency to resist change.
To cultivate lasting habits, take small steps.
9. Journal your investment decisions
Journaling helps:
– Overcome hindsight bias
– Focus our thoughts
– Retain what we read and deepens our understanding
10. Valuation isn’t about being precise.
Just by being approximately right while having a good MOS is enough to get the job done.
Focus on finding a big gap b/w IV and share price while using conservative estimates.
And that’s a wrap!
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>> Click here to check out Gautam Baid’s The Joys of Compounding