The Potency of Compounding

Escaping 'The Matrix'!

‘Kaun banega crorepati’ roughly translating to ‘who shall be a millionaire’, a sensational quiz-show which began airing in the early 2000s and just concluded its 16^th season here in India, had us all hooked back in the day! Millennials from modest upbringings would probably recall their parents gasping as the contestants creeped up to the highest reward, woefully awaiting such a lucky break in their own lives as the only ticket to fortune... And while many of the Gen X’ers rejoiced getting to a fraction of the game-show winnings upon the golden handshake at their ripe age of sixty, would such a tenet really suffice in today’s day and age? While an archetypal 9-to-5 may form the initial basis for our earnings, if we go through our entire careers just selling time without any investments or alternatives, then we’ll surely max out sooner or later. Hence, it is imperative to grasp that the only plausible solution lies in getting to a stratum where wealth breeds wealth!

So first off, let’s be clear that there’s a heaven and earth disparity between investing during the first decade of your career and squeezing out peanuts during the last like our forefathers! Even if you’re pouring in the exact same amount into the exact same instrument, the returns from the former would dwarf that from the latter, rather interestingly by many orders of magnitude, that too without putting a single extra penny into the accumulated corpus… Therein lies the power of compounding! It works at every level but becomes more and more visible with the sum invested. As we know, the first crore lingers the longest!

Now, I’ve been dibble-dabbling in the world of investment for some time now but only taken it up sincerely of late. Growing up, we were always advised to allocate our funds in very low fixed return instruments like FDs, NSCs, KVPs and the likes, the reality being that these can only help safeguard your money as an emergency fund rather than grow it, by simply matching the inflation rate. Similarly, savings bank accounts are even worse shrinking your worth over time. So, with ballooning costs of real estate, education and what not, what else can we turn to? Wasn’t the stock market taboo, with trading equivalent to gambling the last time we had checked with our predecessors?

Well, may be the question we ought to be asking ourselves is what really is 'risk' in this context… So, let’s say you purchase a relatively benign mutual fund plan while the market is fluctuating, it is of great relevance that the short-term highs or lows are only notional gains or losses, which would only be realized upon the sale of such an asset. And consistently investing in a risk adjusted diversified portfolio has historically always given a higher order of return in the long run also ensuring liquidity, even without precipitous attempts at angel investing or crypto harvesting or the likes.

Trust in the potency of compounding and all of a sudden having a net worth in the ballpark of a multi-millionaire doesn’t seem so farfetched after all… At the end of the day, patience and a structured approach are vital for building generational wealth, especially with an ever-compounding family size! 🙏

God's Own Country!

For my wifey & I, globetrotting has always been more about wandering new landscapes rather than imperceptibly differing clones of the same handful. And although the notion of dusting off our passports has been astir for a while now, the reality of having to preserve all the frenetic toddler routines even while vacationing, has led us to briefly hold off on any such lunacy until more delectable prospects. So, scratching off one of the few remaining albeit worthiest inclusions on our domestic bucket list, the backwater haven Kerala lived every bit up to its sobriquet as God’s own country!

It really is a one-stop shop... Be it the labyrinthine network of brackish lakes and streams dividing the fishing and farming communities into endless islets, or the intermeshing tides from the Indian Ocean and the Arabian Sea confusing the yellow sands by soaring to disparate levels, or the higher altitude regions here sprinkled with tea gardens for miles around, playing host to countless hopefuls seeking first-rate Ayurvedic therapy, Kerala has it all! Our itinerary took us from Kochi to Alleppey to Munnar before we backtracked our steps transfixed. Strutting along the expansive waterfront paddy fields took us away to an unreal world, while witnessing the sun rise over its rippling image, from our personal houseboat floating on the sedate bayous, made us feel like a billionaire for the nonce… Hehe! The meandering hills too as my better half often ponders, are soul nourishing with spice gardens, tea factories and what not elevating an already ethereal experience and offering us some much-needed reprieve, albeit with some time to reflect… 

I think it is indubitable that the first few years of having a child exert gargantuan stress on any relationship, and there’s no indignity in admitting that the last couple of years have been an acid test for ours. Almost all relations have their rough patches but only the truest ones survive... Strenuous times and reality are bosom buddies after all! On that note, recalling an interview with Michelle Obama, if changing the child’s diaper can be a valid point of debate for a former POTUS and his first lady, then one can only imagine the scene from an average family household! Hahaha… Light-hearted should never be on short supply though.

Regardless, having been on a topsy-turvy ride, we can liberally endorse that actions speak far louder than any words… And although there may be those who simply get off on using sharp jibes in the guise of honesty, I’d say the line between the two is defined by the zeal to be factual and part of the solution. Just like our surrounds, every household must have some reasonable and mutually agreed upon ground rules for sustained wellbeing and functionality. Keep in mind that silent sacrifices form the building blocks for most families… Afterall, have you prayed for every puny thing that your life is woven around today? As often depicted in movies, anyone can act like a distraught zombie, but real strength is being able to keep a smile on your face during the worst calamity and safeguarding your interests with calm ferocity.  

Recalling Bruce Lee’s famous quote “I fear not the man who knows ten thousand kicks, but the one who has practiced a single kick ten thousand times”, it is funny how so many folks these days have their heads all over the place despite the same few questions presenting themselves to every generation. Shallow half-assed attempts in a million directions are as good as none, but spearheaded efforts in a few may take you places indeed. Many might think having a prefabricated empire is a real flex, but guess what… That flex isn’t yours but only belongs to those who built that empire brick by tiny brick! Nevertheless, what’s next? Desserts? Salt-flats? May be some faraway novelty? Guess only time will tell… But for now, it’s all about treading the set path on a playing field that's rarely level.

Fancied winding this one up with Loki's 'burdened with glorious purpose', but I suppose that's a bit too corny, eh? So...

BE THE FORCE!!!

Hopping on the Ghibli bandwagon :P