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Posted On: September 14, 2023

How to Grow money literally

It is easy to grow money !!!! Yes, I have done it and it works.

I distinctly remember being given a piggy bank as a school going kid a was asked to put all spare change into the piggy bank. At the end of about 6 months, my grandpa brought me to a bank and opened an account (with some additions from him). He asked me to collect change each day into the piggy bank and deposit to the bank account at end of each month. I still maintain this account and that is what I call my secret stash.

When I started to learn more about the stock markets in the 1990s, I used to help my dad and grandpa apply for IPOs and sell them off on listing. Yes, the typical apprentice within the family.

Then during the working years, I started another piggy bank. This time, I took a small portion of my earnings each month and put into a piggy bank that I called “Vivek Investment Bank”. At the end of 12 months, I took the money and opened a stock broking account and started to trade.

In the initial years, I lost some money ( and still do loose some to be brutally honest). But, some of my investments grew.

My target has been to make more than the interest that I get in the bank. That was my opportunity cost.

So each year, I targeted to grow my accont by above12% range. I have seen few market cycles and crashes. I crashed in the first cycle but learned from it.

I have discovered some do and dont’s that I think are worthwhile for anyone starting off to know.

1.     A journey without a destination is an adventure:

• Depending on the goal tenure, I adjust my investment philosophy.
• Example, my retirement goal investments are long term based and I hold my stocks a longer duration here. But my annual holiday goal investments are short term and I trade periodically on this account.

2.     “Stick to your knitting” as Tom Peters says.

• Choose asset classes that you are familiar with.
• Example, I invest in stocks , funds and derivatives. I do not do FX or commodities because I find them a bit more complex to handle.

3.     Focus and Target:

• Set a target return and time frame for each investment in the market.
• Never be greedy. once the target is reached (both in time and return perspective), evaluate if you need to reset the targets. If not, exit the stock.

4.     Research pays:

• Never buy any stock that is actively publicised but has a negative cash flow.
• Example, I have seen more softdrink ads than any other food like rice or wheat.

5.     Never invest in hurry & repent at leisure:

• Always have a trading plan for each stock you invest in. Trading plan should include your entry price, target price, target date and stop loss.

6.     Monitor your portfolio daily.

• Yes, daily. It takes just 20 to 30 mts to do it.
• You need to spend this time to take care of you hard earned money and trust me this makes your money very happy and it starts working for you in return.

7.     Invest regularly:

• Add to your investing account regularly.
• I invest each quarter and know some friends who do it yearly.
• Any periodicity is good, just follow it.

8.     Get more piggy banks:

• Have multiple accounts with different brokers and set goals for each investment. Its like have a piggy bank for a goal.

With these 8 simple guidelines, I have been able to grow my money. am sure anyone can.

Ho most importantly, teach your kids to save and invest money as early as possible. Do not teach them to just spend money which is what most of us do.

Happy investing !!!