Joys Of Compounding: The Passionate Pursuit of Lifelong Learning

by Gautam Baid

More important than the will to win is the will to prepare. —Charlie Munger

Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day.

before. Knowledge comes from experience, but it doesn’t have to be your experience.

Therefore, no books are necessarily “the best.” Usually, some combination of books, in unison, produce a big, nonlinear impact.

When you find your North Star, that is, the most important thing that sets your life’s course, you learn where you’re headed. And that is such a good feeling. It is fine for your North Star to change over time. But whatever it is right now, let it guide you. Your North Star is highly meaningful and vital in a personal context, so aiming toward this beacon of light will bring great happiness to you every day.

Always give time to your parents. We are so busy growing up that we often forget they are growing old. Parents usually don’t ask that we spend time with them, but recognizing need is part of what makes one a person of value.

It is better to be an average guy on a star team than a star on an average team. The former will be better for you in the long term; the latter is just an ego trip.

A tree that wants to touch the sky must extend its roots into the earth. The more it wants to rise upward, the more it has to grow downward. Similarly, to rise in life, we need to be down to earth and humble.

“The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot.

ACHIEVING FINANCIAL INDEPENDENCE

It is difficult to get a man to understand something, when his salary depends on his not understanding it.

Whose bread I eat, his song I sing. —Charlie Munger

Once you achieve this state, it changes everything. It enables you to look at reality in a truly unbiased manner. Aim to achieve financial independence at the earliest time. That is when you will start seeing the world as it really is. It is difficult to think and act long term unless you are financially independent. Financial independence doesn’t mean you don’t work, just that you don’t need to. It removes the internal distraction of unpredictable employment.

The goal of financial independence is to stop depending on others (bosses, clients, a schedule, a paycheck). True wealth is measured in terms of personal liberty and freedom, not monetary currency. Money alone does not signify independence. Control over time does. The only definition of success is to be able to spend your life in your own way.

Building wealth over time has less to do with your income levels or investment returns and more to do with your savings discipline. As Peter Lynch says, “In the long run, it’s not just how much money you make that will determine your future prosperity. It’s how much of that money you put to work by saving it and investing it.

“In the short run, the market is a voting machine, but in the long run, it is a weighing machine.”1

One Small Step Can Change Your Life: The Kaizen Way by

Human beings are a messy living compilation of a multitude of cognitive and behavioral biases, especially when it comes to matters related to money. The auction-driven nature of the stock market, which is a heady cocktail of swirling human emotions and sentiments, makes it the perfect place to look for pockets of periodic irrational behavior, which is sometimes extreme to the point of being ludicrous. Greed and fear are always present in abundance in the market, and the most recent marginal opinion, not long-term intrinsic value, determines the present stock price. This sets a perfect stage for getting incredible bargains that no private business owner in a sane state of mind would ever offer.