Category: Uncategorized

Wikipedia defines Moat as a deep, broad ditch, either dry or filled with water, that is dug and surrounds a castle, fortification, building or town, historically to provide it with a preliminary line of defense.

A runner can’t simply run all seven days in a week with the intention to improve performance; run fast or cover longer distances in quickest time. They have to develop “Runners Moat” which is the core or basic fuel required for efficient running engine. This core strength is the first line of defense from injuries & performance issues.

Few ways runner’s can build a moat:

• Cross training
• Adequate hydration
• Right nutrition
• Speed drills
• Well rested body

Developing moat creates a competitive advantage which, in turn assists in delivering desired results.

When it comes to investing for goals, individuals completely turn a blind eye. Minimal attention is paid to process & planning for investing their hard earned money.

Over the years I have realized bias for particular asset class as an investment to fulfill financial goals. These individuals primarily follow herd mentality; for instance the approach here is “What’s good for Mr. Kumar will be good for ME!”

One needs to understand every individual is different and you cannot have one “asset class fits all” approach for achieving financial freedom.

While investing, one needs to ask few questions to create a moat for self.

• Why am I investing? ( Goals – For children / vacation / new car / retirement etc?)
• What is my time frame?
• Is the investment liquid?
• What if my investment goes under water?
• What if I lose my job today?
• Have I set up a liability / risk management / contingency system in place?
• Do you have a succession plan in place?

Have a moat and it’ll become your first line of defense against any unexpected or unforeseen event.

Content : Ajit Kaushal

Muscle cramps are a runner’s nightmare.

One moment you’re flying in your zone, and very next moment you’re hobbled in pain, your race goals goes down the drain.

There can be many reasons for this situation:

• Dehydration or electrolyte loss
• Altered neuromuscular control because of fatigue
• Running at a faster pace relative to their current state of training
• Chronic illness, family history, and certain medications

Each runner has different requirements, one needs to identify & implement appropriate solution which could be:

• Right training
• Hydrating well
• Right fueling
• Strategic pacing
• Tapering

When it comes to investing, cramps have a different definition.

It can be defined as a pain or discomfort in the portfolio that can happen due to:

• Inappropriate allocation of funds, portfolio overweight on particular asset class such as real estate or investing without purpose and so on
• Liquidity crunch
• No defined time frame or objective
• Paying attention to market noises; TV, newspaper etc

Can these cramps in investment portfolio be avoided?

Yes, cramps can be avoided.

What can be possible solution ?

• Have a BUCKET STRATEGY in place to meet your CASH FLOW requirements
• Invest with a GOAL, MULTI YEAR TIME FRAME & VOLATALITY ( DIS) COMFORT
• Do invest in what  that gives you sound sleep
• Always remember – What’s good for Mr. Kumar MAY NOT BE GOOD FOR YOU
• RING FENCE your assets
• Have a LIABILITY and CONTINGENCY solution in place
• Keep in mind, YOUR EARNING YEARS are FIXED, however EXPENSES will COMPOUND
• Keep your debt in check –  ideally one should be DEBT FREE by age 45-48 yrs

There’s no right or wrong approach to mage investing cramps. One has to learn to make friends with cramps (Volatility) and treat these as market cycles.

Content : Ajit Kaushal

Compounding is the process of the exponential increase in the value of an investment due to earning interest on both principal and accumulated interest.
We want a change NOW !
We live in an environment where we want :

All this instant gratification makes one believe that one deserves things / results right NOW, without working for them.
But if one continues to believe this thought then be prepared for severe disappointment.
What it really takes is that one small consistent step over and over again coupled with self belief to start the journey and achieve milestones.
A new runner should be able to run a half marathon in a span of 6 months of consistent training and discipline effort:

By the end of 25 weeks one should be able to run the entire half marathon much faster than you thought was possible, just believe in yourself.
So what habit we get out of all of this just walk/jog every day, whatever your fitness level is just do small actions every day all of this is display of COMPOUND effect.
When investing, there are two broad classifications of interest : Simple & Compounding
Simple interest is calculated on the original or principal amount of an investment.
Compound interest is calculated on the principal amount and also on the accumulated interest of previous periods, and can thus be defined as “Interest on Interest”.
Compounding is a simple & powerful concept when implemented for creating long term wealth.
Let’s see how they work.
Suppose Mr. Kumar & Mr. Kaushal invest Rs. 1,00,000 in two different accounts. One carrying simple interest and other compound interest.
The interest rate for both the accounts is 8% and is deposited for 25 years bucket.

Mr Kumar invested in simple interest account. He withdrew Rs.8,000 as interest every year for the next 25 years and left principal Rs. 1,00,000 back. After 25 years Mr. Kumar would have withdrawn Rs. 2,00,000 as interest and capital of Rs. 1,00,000.
Mr. Kaushal didn’t withdraw interest, but left both capital and interest invested for next 25 years. After 25 years Mr. Kaushal would have accumulated Rs. 5,84,000 as interest in addition to principal amount of Rs.1,00,000.
Refer below graph, Mr. Kumar’s investment grew in a straight arithmetic line whereas Mr. Kaushal’s investment grew geometrically; rapid and ever increasing.

The key is maximizing power of compounding, the snowball effect that happens when your earnings lead to long term wealth creation.
Compounding is an extremely powerful tool, especially if one can harness it over time.
That means realising that the EARLIER one starts to invest and the MORE you have to invest will unravel benefits of compounding.

Content : Ajit Kaushal