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The Aspirational Investor: Investing in the Pursuit of Wealth and Happiness
very Goods Condition Book
240 pages, Hardcover
Published July 2, 2015
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246 people want to read
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Displaying 1 - 10 of 10 reviews
September 22, 2016
I wish they spent more time in the process and gave many more examples of the framework at play.
However, the framework itself is well thought out, and the ideas behind it are ones I'll use with my financial planning.
However, the framework itself is well thought out, and the ideas behind it are ones I'll use with my financial planning.
December 1, 2023
Why does the theme of successful investing always revolve only around ‘beating the market’? Ashvin B. Chhabra, Director of Merrill Lynch, offers an alternative view on the need to see investing as a tool to fulfill our life needs, rather than as a game of always being a winner.
Linking investment goals with Maslow's Hierarchy of Needs, the author has come up with a robust classification to align our life goals with our investment goals. He notes, “Every individual or family needs a framework that delivers on three principal objectives:
1. The certainty of protection from anxiety and poverty, or safety.
2. A high probability of maintaining your standard of living, or stability.
3. The possibility of achieving upward wealth mobility and creating the potential to meet your aspirations.”
Therefore, he divides the investment buckets into three: the safety bucket, market bucket, and aspirational bucket. The safety bucket will have the retirement corpus, calculated in accordance with the number of years after retirement and the total monthly expenses incurred in the current year. It also includes insurance and human capital. Human capital in the form of education is a significant safety investment often ignored by many present-day youngsters. When Warren Buffet was asked what the best type of investment during a market crash and inflation is, he responded, “Investing in yourself will be the best investment during those times.”
The market bucket should provide stability, in the form of equities, gold, monthly income sources, and other investments that can fluctuate over the short period but yield compounded growth in the long term. Diversification is the key to succeeding in filling the market bucket. Only when the above two buckets are secured can one think about the aspirational bucket that includes business, buying a home, and real estate, etc.
One of the key takeaways from the book is that we often consider business as a safety bucket without fulfilling the market bucket. He writes, “The answer is simple. The business goes straight into your aspirational risk bucket because the asset is characterized by higher-than-market return and is accompanied by higher-than-market risk. Most business owners, rather than classifying it in the aspirational bucket, attempt to place their business in the safety bucket. At the same time, they estimate a continued high rate of growth or return of the business into the future. This behavioral trap is a classic example of the ‘illusion of control.’”
The most significant takeaway is assigning Maslow’s Hierarchy of Needs as a framework for investing, an excellent way to manage risk in life and ensure peaceful sleep every night.
Linking investment goals with Maslow's Hierarchy of Needs, the author has come up with a robust classification to align our life goals with our investment goals. He notes, “Every individual or family needs a framework that delivers on three principal objectives:
1. The certainty of protection from anxiety and poverty, or safety.
2. A high probability of maintaining your standard of living, or stability.
3. The possibility of achieving upward wealth mobility and creating the potential to meet your aspirations.”
Therefore, he divides the investment buckets into three: the safety bucket, market bucket, and aspirational bucket. The safety bucket will have the retirement corpus, calculated in accordance with the number of years after retirement and the total monthly expenses incurred in the current year. It also includes insurance and human capital. Human capital in the form of education is a significant safety investment often ignored by many present-day youngsters. When Warren Buffet was asked what the best type of investment during a market crash and inflation is, he responded, “Investing in yourself will be the best investment during those times.”
The market bucket should provide stability, in the form of equities, gold, monthly income sources, and other investments that can fluctuate over the short period but yield compounded growth in the long term. Diversification is the key to succeeding in filling the market bucket. Only when the above two buckets are secured can one think about the aspirational bucket that includes business, buying a home, and real estate, etc.
One of the key takeaways from the book is that we often consider business as a safety bucket without fulfilling the market bucket. He writes, “The answer is simple. The business goes straight into your aspirational risk bucket because the asset is characterized by higher-than-market return and is accompanied by higher-than-market risk. Most business owners, rather than classifying it in the aspirational bucket, attempt to place their business in the safety bucket. At the same time, they estimate a continued high rate of growth or return of the business into the future. This behavioral trap is a classic example of the ‘illusion of control.’”
The most significant takeaway is assigning Maslow’s Hierarchy of Needs as a framework for investing, an excellent way to manage risk in life and ensure peaceful sleep every night.
April 6, 2019
I loved this book. It was very educational and motivating. His writing style reminded me a lot of Michael Pollan's. He gently leads you into understanding and provides you with morsels of fun facts.
April 17, 2019
A book with sound investment allocation ideas and where their place is in handling your money. In the framework, with three risk groups, the aspirational one is interesting, it is an allocation of your choice(no suggestions there) of high risk and high reward, Naval would put starting a startup/small biz, angel investing and crypto in it.
It's primary audience is a financial advisor, however the basic ideas can be used by anyone who has started saving money
It's primary audience is a financial advisor, however the basic ideas can be used by anyone who has started saving money
January 1, 2020
Good book on Goal Based Investing. I regularly invest in stock market and making separate bucket so that the safety goals (like retirement and children education) are not impacted by the market volatility is very enlightening. Must read for all the investors other there.
June 19, 2018
This is a very insightful read; a must for anyone serious about investing. Opens up a lot of concepts regarding portfolio construction & asset allocation.
April 10, 2021
Good book
The author gives a very concrete form to the concept of a portfolio that will form a framework for designing an investment strategy.
The author gives a very concrete form to the concept of a portfolio that will form a framework for designing an investment strategy.
May 17, 2021
Below average book!
June 12, 2021
Simple book that I think requires a lot more experience and knowledge to truly appreciate. But worth reading.
January 7, 2024
tldr: investing but with ✨goals✨ I bet that never occurred to you
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Displaying 1 - 10 of 10 reviews