I start with a quote from Warren Buffett.

“There comes a time when you ought to start doing what you want. Take a job that you love. You will jump out of bed in the morning. I think you are out of your mind if you keep taking jobs that you don’t like because you think it will look good on your résumé. Isn’t that a little like saving up sex for your old age?”

Warren Buffett

 

 

Again Mark also has a wisdom to share

#1 : Don’t get job, get a skill : Most conventional wisdom is ‘go to school, work hard, get good grades and get a job.’

No doubt this wisdom is true to some extent. Go to school. Get real knowledge. Get a job to get a basic cushion in life. But after that do what you really love or can do best.

# 2 : Invest in yourself : Invest in property, shares, savings to get best returns. Again many stalwarts differ on this also.

The return of investment done for self-development gives you greatest returns. People who invest in themselves to gather more knowledge, wisdom and skills are always way ahead of others in long run.

The return of investment done for self-development gives you greatest returns. People who invest in themselves to gather more knowledge, wisdom and skills are always way ahead of others in long run.

#3 : Shy away from loans : This is most important wisdom to be learned. When we take a loan for our house, we are paying 12–14% interest (Taking everything into account),in India. Appreciation of property prices around the world has an average of 14% in long-term (Indian context). Thus real saving or return of investment is mere 2 % !. This is lesser than your savings account. Equity on average has delivered 17% return over long-term like 20 years.

A mortgage of 11% per annum for 20 years on a 50 lacs loan makes you dearer by

1,18,79,721/-. With appreciation value of 2% per year (After deducting loan amount), your net gain would be 14,764,408/- !

For the same amount invested in equity let us see the results.

Its hopping 75,797,749/- !. A return around five times the initial investment. Now two friends who started with same EMI/SIP amounts, have a difference in net worth by 63,797,749 – 14,764,408 = 49,033,341/- !. About 5 times!.

Equity market runs in cycles. There are cycles for everything.If you enter and exit at the optimum time, you can earn around 40% return. But yes it needs a lot more patience and knowledge than just sit and invest in index funds.For investment patience is the real winner.

When you take a mortgage you pay interest more than you principal amount in 20 years!. If over inflated property bubble (Usually supported by black money) bursts as it did in 2008, you are left with nothing!

Bonus Tip : Equity market runs in cycles. There are cycles for everything.If you enter and exit at the optimum time, you can earn around 40% return. But yes it needs a lot more patience and knowledge than just sit and invest in index funds.For investment patience is the real winner.

One more from ‘Oracle of Omaha’ itself

Take Away

  1. Do a job but to learn the skills and not to stick with it.
  2. Greatest investment is in self-development.
  3. Don’t take mortgage for home. Invest in equity instead.

What are things a person should not chase in life?

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Hemant Pandey
Hemant lives in Mumbai (India),writes on Quora (2600 followers, 2.8 million views).Published 5 books on Amazon Kindle. Entrepreneur, Writer, Mathematician, Professor.