Category: Everything else

Crap days suck. They make you feel (hopefully only temporarily) small, insignificant, and unworthy. These become tougher to handle when they come one after another. A crap week can be a significant dent to your morale and a crap month can play havoc with self esteem.

That said, I always find that extended crap periods are tremendous sources of learning. They force us to slow down, reflect, and think about why we are doing what we are doing. They also encourage us to reflect on our recent choices and decisions. If it weren’t for them, we’d probably just be cocky, shallow, and confident without reason.

Life makes us earn our stripes. Crap days/weeks/months are a key part of paying our dues.

This might not help you feel better immediately (there are very few great quick fixes after all) but the next time you feel you’re going through a really bad day and finding it difficult to find reasons to smile, take a moment to ask yourself 2 questions –

1. What am I learning from this?

2. Is it really THAT bad? (Unless you recently a lost a limb or your ability to walk, the chances are you are doing just fine.)

What doesn’t kill us does make us stronger. Crap days are typically just days of great learning in disguise.

This week’s learning is part 3 of a 5 part series on Personal Finance and Investing inspired by 3 books – The Investors Manifesto by William J Bernstein, I Will Teach You to Be Rich by Ramit Sethi, and The Millionaire Teacher by Andrew Hallam. (Parts 1, 2)

After last week’s cautionary note on viewing houses as investments, we move on to investment “don’t dos”..

1. Avoid actively managed funds.
– Actively managed funds take a hefty portion of your returns in fees and claim to be able to time the market.
– At this point, repeat to yourself – NO ONE KNOWS THE FUTURE.
– At every point of time, you will have funds who will beat the market. But, past returns are not a guarantee of future returns and long term returns of actively managed mutual funds make for dismal reading.
– Bill Bernstein pro tip: Treat every mutual fund adviser as you would a con man and you will do just fine.

2. Avoid stocks and gold.
– Popular stocks aren’t the ones that make money. Remember that every time you trade a stock, you are competing against finance professionals who do this for a living.
– While individual stocks can give you high returns, remember that high returns can only be achieved with high risk.
– You are your worst enemy. You cannot time the market. Don’t try. And don’t look for patterns in the financial markets. There are none.
– While Gold captures the imagination of the media, gold’s return over the past century has been poor.
– A pre condition to being a successful investor is a firm grasp of financial history – even the experts at Long Term Capital Management neglected history.. at their peril.

Bill Bernstein pro tip: Remember Pascal’s Wager and it’s implication on investing – the goal of investing is not to get rich but to avoid dying poor.

Sketch by EB

Related book recommendations –
– On Investment Theory – a random walk down Wall Street (how stocks, bonds, portfolios behave)
– On Financial History – Devil take the hindmost by Edward chancellor (on bubbles and panics)

So, what about the “do’s?” Coming up next week.

As I lay in bed to sleep last night, I heard the ticking of a clock. After a day of resisting the temptation to sleep to avoid jet lag after a long flight that got in in the morning, I was ready to crash. So, it was no surprise that I was asleep barely after I noticed a few ticks.

I woke up to a bright and sunny Saturday morning and suddenly, I heard the ticking of the clock again. A few seconds later, I went right back to sleep. No ticking sounds.

When I woke up again, the ticking of the clock resumed. I decided to do some reading while I was lying down. So, I picked up my phone and began scrolling through my feeds and reading some of the blogs I follow. I put my phone down a few minutes later and voila, the ticking sound resumed.

What just happened? The clock had always been ticking. It’s just that I’d shut it out completely when I was engrossed in my reading. What if it’s that way with all our little annoyances and life’s problems? When we actually get engrossed in something of value, perhaps we just shut all the inconsequential noise out..

I lay in absolute quiet for a few minutes. Well, quiet except for the ticking sound. I was completely conscious of it and found myself slowly getting irritated. Couldn’t the thing shut up when I wanted it to? What’s the point of the ticking anyway?

“Time!” – said a voice in my head that didn’t quite sound like me. “Time!” – I heard my voice shout as realization dawned. I finally realized the enormity of the one word that other voice had said.

I woke up ready to take the day on and do something worthwhile. I had learnt my lesson – whether I noticed it or not, the clock of life was going to continue ticking away…..

… and time, after all, is what we make it.

Out of all the brands and services I use, 80% are those I use out of a mixture of necessity, habit, and a preference for the default option. There is very less love and loyalty here.

The remaining 20% are a completely different matter. Half of these I love as an admirer of the good work they do. Apple and Amazon fall into this category. I listen to what they have to say, watch their promotional videos, and don’t mind their occasional unwanted email.

The other half are brands I love. These brands simply make me want to come back for more. Two that repeatedly wow me are Audible.com and Singapore Airlines. Audible.com’s customer service has been consistently impeccable. They’ve been so good that I once asked them if they could share their training material because their care comes through even on an email – every single time. They didn’t quite comply on that one but hey, I knew it was a long shot.

Singapore Airlines is a real anomaly in the airline world. Most simply suck. Others do a half hearted job of trying to make you feel comfortable. Singapore Airlines takes it to a whole new level. I would wager a bet that the Economy class on Singapore Airlines treats you better than Business class on most airlines. And the Business class, well, is just something else.. (I hear Qatar Airways matches up in most respects but I’m too much in love to even consider a switch)

I realize that part of the magic of Audible, Singapore Airlines, Apple, Amazon and the like is that they make you want to come back for more.

We live in a world where we are all, in effect, virtual brands. We float our wares online through our Facebook, Twitter, LinkedIn, and Google+ profiles and of course, have an important offline presence where we actually get the opportunity to touch people every day.

How do we do? Do we make our customers, clients, and colleagues want to come back to us for more?

I am not aware of any shortcut to good decision making. We all pay our tuition with many a dumb decision. But, that’s not my point – this post is all about preventing the extraordinarily dumb decisions.

When we make decisions, we typically default to the following question –  ‘What decision can solve my current problem?’ This approach is excellent during rapid fire decision making because you can always make another decision that will correct the previous one.

The decisions we regret are those that are extraordinarily dumb that make us ask the “what the hell was I thinking” question. This happens because the default question has a very short term focus.

Prevention requires us to add one additional question to our decision making process – ‘What will the consequences of this decision be 5 years from now?’

Here’s an example – the high school I studied in had a stormy management change a few years back during which a very popular principal was replaced by another in the middle of the academic year. All sorts of protests followed from both students and alumni.

Students could easily be punished but controlling the alumni was going to be much harder. Someone in the management asked the default question – ‘What decision can solve my current problem?’  And the obvious answer that emerged was to make all alumni showing up at the school feel unwelcome. The watchmen at the gate treated alumni like criminals and teachers weren’t allowed to meet the alumni. I experienced this and it wasn’t pleasant. In time, I understand they upgraded the policy from being unwelcoming to banning alumni altogether.

Now, imagine if someone had asked the question – ‘What will the consequences of this decision be 5 years from now?’ Would the decision have passed the test? Nearly every school around the world works incredibly hard to keep great relations with alumni. There are many reasons – aside from fostering a culture of loyalty, schools inevitably reach out to alumni for all sorts of favors including donations and sponsorship. I realize I’m already referring to “them” as “the school” and not “my school” and I tend to be the fiercely loyal sort. I sincerely hope they reconsider..

When we make decisions this week, let’s pause for a moment and make sure we consider the long term consequences. One additional question to save many a future regret. That’s not too bad now, is it?

PS: For a related thought, check out Derek Sivers’ fantastic video – Don’t punish everyone for one person’s mistake

I began looking up the requirements for a transit visa to New Zealand a few days back. It turns out that I have to cough up $150 and go through the usual amount of admin hassle for the privilege of spending 8 odd hours in transit at the Auckland airport.

Seriously?

Of course, there are a few countries on the waiver list and of course, India isn’t on it. If I had done this research before I booked my non-cancellable ticket, I would have avoided the NZ stop altogether. But, what’s done is done. This time, I decided to respond to this annoyance differently – by focusing on developing the world’s best visit visa system. Here is my 5 step plan – 

1. Abolish transit visas. (Again, seriously?)

2. Every visit visa (3-6 month – business/tourist visits only) application needs to meet a target of 30 points. The home country pre-allocates the 30 points to it’s favourite countries – So, European passports get 30 points pre-filled; this is how the system works today.

3. If you are from a country that starts with 0 points (that’s at least 2.5 Billion Indians and Chinese or put differently, about half the world’s population), you gain 3 points for every business trip made to countries on the home country’s “favorite” list and 1 point for every tourist trip. Every repeat trip gives you 1 and 0.5 points respectively.

4. The UN requests every country to fill in a point allocator page in the first page of every passport so immigration officials can stamp in new additions. This does not apply to long term stays or immigration as I understand these situations are more nuanced.

This way, if you’re a Chinese national whose made business trips to 10 different European and American countries, you earn the 30 points on merit and qualify for visa-on-arrival.

This post is specially dedicated to all the current and future bureaucrats in the ALAD community. Let’s get this changed then.

When conversations hover around getting things done, our usual area of focus is time. Yes, we always have less time than we need. Get over it.

When we actually take the trouble of breaking down productivity –

Productivity = Working Effectiveness * Working Intensity * Time

Working effectiveness is the ability to focus on, and do, the right thing. It involves asking the right questions and focusing on things that actually move the needle.

Working intensity consists of 4 parts –

1. Physical intensity. Are you physically able enough to focus intensely for sustained periods? You can’t keep up physical intensity if you are extremely unfit, have eaten bad food, or are sleep deprived.

2. Emotional intensity. The best work is done in calm.

3. Mental intensity. Ability to focus without checking our social media or our email.

4. Tool expertise. If you are crunching huge masses of data on Excel and move around your spread sheet using the mouse you are most likely working at a speed of 0.5x. How good are you at the tools of your trade? Competent carpenters don’t work with blunt tools.

If we want to get more done in a day, let’s stop mucking around with extra hours. As you probably see, time may be directly proportional to the equation as a whole but is inversely proportional to intensity.

In reality, once we set aside must-attend meetings, we have very few productive hours in a day. We need to get intense or get out.

I had tried out an “offer of help” post in October last year and it turned out to be a lovely thing to do. I received 4 requests from readers I’d never met – 3 of them were email exchanges and 1 of them was a resume review. The resume review was wonderful since I actually met one of the members of this community in person in London.

I would like to offer a bit of my time to be of help to you over in the coming 3-4 weeks. I’ll borrow from my previous post to explain what I have in mind.

What do I mean by help? If you are reading this post, it’s very likely that you’ve been reading this blog for a while and have your own ideas. Specific areas where I feel I can add value in are help around presentations, job search related issues, resume review, structuring content or ideas. That said, if you are looking to bounce a new project/initiative/product with someone or think through a specific problem or philosophical struggle, I think I can help there with an additional perspective. And if I can’t help, I’ll do my best to connect you with somebody who can.

Why am I putting this up here? I feel like it’s been a while I’ve been of help with someone. In fact, I feel like all I’ve been doing in the last month has been asking others for help on this or that. So, I’d love to hear from you and hopefully add value.

I am reachable on rohan@rohanrajiv.com – I look forward to hearing from you.

This week’s book learning is part 2 of a 5 part series on Personal Finance and Investing inspired by 3 books – The Investors Manifesto by William J Bernstein, I Will Teach You to Be Rich by Ramit Sethi, and The Millionaire Teacher by Andrew Hallam. (Part 1)

Buying a house and investing in real estate are two different things. Houses are purchases, not investments. That said, it probably makes sense to buy a house if you are certain you’ll live at the place for 10 years or more.

Points to note
– The costs of a house are much higher than just the sticker price – add in property tax, realtor fees, renovation, and maintenance
– In expensive cities, renting can work out to be a better long term strategy
– Buying and selling real estate is a different ball game – tread with care as you are up against professionals with a nose for value
– Pro Tip on real estate deals: Divide how much you pay for the property by how much it rents at. If you can pay off the property in 10-14 years, you’ve likely gotten yourself a good deal

Recommended steps if you decide to buy a house
– Put down 20% as down payment
– Take a 30 year fix rate mortgage (long term mortgages with option of paying larger amounts)
– Don’t make monthly payments more than 30% of your gross income

Sketch by EB

The conventional advice on investment is to buy a house. Our personal finance gurus recommend we think about our decision and ensure it makes sense for us instead of just taking the plunge because everyone else is doing so.

So, what do they recommend for long term investing? Coming up next week..