The First Lesson in Making Money
In order to make money you first have to learn how, not to lose it.
It is the most slippery thing ever invented by man. It’s hard to hold onto. Its inherent tendency is to slip away. The tighter you want to make your grip, the more slippery it gets.
Before you learn to make it, you have to learn how to handle it. Because, the man who gets two coins and then uses both of them is never going to become rich. He will live till the end of his live struggling for basic survival.
Wise is that man who saves a coin and then lives on the other coin. Yet this man cannot become rich, until and unless, he finds a way to multiply his saved coins.
Yet I must warn you that two people might try to multiply their coins & yet one ends up becoming extremely rich and the other a bankrupt.
One is impatient. He wants to become rich already. Hence, tries to multiply those coins by ten times at just one go. He is the one who ends up becoming bankrupt.
The other one is patient. He knows that things take time. He works on carefully on his coins and increases them gradually over several years. He ends up becoming extremely rich because his coins have multiplied by more than a hundred times.
Impatience is the root of all evil
Impatience clouds judgement. The lure of instant money makes him blind towards the inherent dangers.
If a person needs a thing badly, then just show him a path to get that thing & he will not waste even a day thinking about the possible dangers of his path. All he will concentrate is on the hope that this path will lead him to his dream.
When you need something badly you try all the methods. And you know what? If you try all the methods you are guaranteed to fail. In order to succeed, you must faithfully stick to one good method.
Why did I say that one of them became bankrupt? Bankrupt is a person who fails to repay his loans. Now, the impatient man is the kind who wants to make a lot of money instantly. He lacks the patience and discipline to accumulate money by saving. So he chooses to take money on loan and then use this money to multiply it.
Blinded by the lure of the promising path, he pours down all the money to get rich quick. He is too impatient to contemplate about the dangers of the path. And if at all he contemplates, he hopes that the dangers will not bite him. However, he is sure that this path will lead him to his goal.
The treacherous path devours him completely. Now, all the money he had taken as loan has vanished down the dangerous road.
He is unable to pay back his loans. Hence, he becomes bankrupt.
See, how impatience clouds judgement.
The approach of the wise man
A man who learns becomes wise. However, a man who refuses to learn, ends up becoming a fool. Even the wise commit mistakes but the learn from them and never repeat them. But the traditional fool repeats his mistakes for the rest of his life.
You don’t need wisdom if you want to earn money. Just show up every day at work and you’ll get your monthly salary.
You don’t need much wisdom if you are earning money by charging for your services.
However, making money from money requires the calibre of the wisest of the human race. In this case, you face the threat of losing the money you already have. So, you can become poorer if you play it the wrong way.
The wise man has just one rule to play his game. And, no matter what, he never breaks his rule. He is a flexible man and bends according to the situation, but he never bends this one rule.
And the rule is.
Don’t lose money.
He doesn’t indulge in activities that can eat up his hard earned & saved money. He doesn’t experiment with his money. He invests in a tried and tested system.
Wisdom is a choice.
And so is becoming a fool.
At one point of my life, I chose to become a fool. The only problem is that I remained a fool for nearly eight years. That’s quite a long time. But, as I said, I chose to become a fool. Because every wise man was once a fool.
The one who learns from his mistakes becomes wise and the one who fails remains a fool forever.
I have learnt it hard way. And hence, its it unlikely that I will ever forget it.
If you’re risking a coin to gain a coin, then you’re applying the strategy of the fools. If you’re risking zero coins to make a coin then you’re applying the strategy of the wise.
You’ve got to figure out what’s that strategy.
You know what? On the long term, the stock market is a bull market.