How do you find what you are passionate about (part 5) - the final note

In the recent past, I have shared four questions that should help you get some idea about what you are passions are. These are:

1. What are the various things you are or were passionate about?
2. Go back and list the moments in the past when you experienced a sense of flow
3. Explore the four aims of life; and
4. What are you naturally good at?

I hope you have spent some time and noted down the answers to these questions. Writing down clarifies the mind – the thoughts which are hazy in the mind become clearer as you pen down the words – grey becomes black or white and clarity emerges.

So here is the final question –visualise this scenario

You are now 90 years old, sitting on a rocking chair outside your porch; you can feel the spring breeze gently brushing against your face. You are blissful and happy, and are pleased with the wonderful life you’ve been blessed with. Looking back at your life and all that you’ve achieved and acquired, all the relationships you’ve developed, what matters to you most? List out your key achievements, key relationships, and your assets – write them down.

This list is what matters to you most - try to spend more time towards achieving this list in your day to day life – prioritise around this list. If you are spending time doing things that are not in this list, your time is not being optimally used.

I believe if you have attempted to answer the 5 questions above with all honesty, you would be already realising what you are passionate about. 

Wishing you all the best with this exercise. I do hope that this series of mine was useful

How do you find what you are passionate about? – Part 4

Here I am back on the topic of finding your passion - till now I have shared three questions that should help you get some ideas about what you are passionate about. These were:

1. What are the various things you are or were  passionate about 
2. Go back and list the moments in the past when you experienced a sense of flow; and
3. Explore the four aims of life

I hope you have found a time slot, when you are at your introspective best. For me it is early in the morning – before dawn – when I feel fresh and I spend time reading, writing, thinking and planning. For some people, their time slot is late at night -when everyone has gone to sleep – and they can relax and introspect.  I hope you have a similiar time slot.

When you do this, it is best to have a pen and paper with you - jot down thoughts that come to you – and you will get answers to some of the questions listed above.

So here is the fourth set of questions that you can think about –

• What are you naturally good at?
• What do people typically ask you for help in?
• If you had to teach something – what would you teach?

Try noting down answers to these questions – it will help you figure out what you are passionate about

My view on Budget and one stock opportunity to invest

I am taking a break from writing about “finding your passion” and writing about budget. Many of my readers had reached out yesterday asking for my views on budget. And so I am forced to say this:

The Indian populace expects miracle from the budget – it is not as important as it is made out to be – years of bad governance cannot be solved by one budget – and I am a long term investor – my equity calls are for 3-5 years – so when I buy my stock, I am looking at period when there will be 3 to 5 budgets and so I cannot be really banking on the budget to give me ruturns. I buy stocks where budget or no budget, the company will make more profits and over time become more valuable and give me returns. In fact, last week the event that has more long term impact on my investments was not the Indian budget, but the Italian elections.

So yesterday, I did not switch on the TV till 9 pm and as I was starting to see what the news said about budget, I got calls from some of my friends to ask for my view on the budget  - and so it is actually today morning in the newspaper that I read details of the budget.

So what is my view – well it is the best that Chidambaram could do under these circumstances. Imagine, as a house hold, you have an income of about Rs. 1 lac per annum and you have a committed expense of Rs 1.1 lac per annum ( that you cannot reduce) – and then assume that you need additional Rs 50,000 to invest in long term asset building (things like education, health etc) . You know that you should not reduce this asset building and so you take loans of Rs 50,000 and invest in this area of asset building. This is kind of situation that India is in. Chidambaram has to balance the income (Rs 1 lac in the example above and INR 10.5 trillion in the real budget) and expenses (1.1 lac in our example above and INR 11 trllion in the real budget).  The asset building in Indian terms is about INR 5.5 trillion and that is funded by govt taking loans to the tune of INR 6 trillion. So what more can you expect from a profligate household like this? Let us accept that we are a poorly managed country. Years of mismanagement of funds has lead us to this situation and one budget can only do so much. So Chidambaram has given some sense of direction - a bit of belt tightening to cut expenses, a bit of fine tuning on where the money is being spent, a bit of tax fine tuning to get some more revenues etc etc.

Really watching the budget for the whole day and trying to buy shares – is foolishness.

So here is one share that I am buying today –Gruh Finance -please study this company –this company is the HDFC Limited of rural India. It is not very well known to us living in metros as it is focussing on home loans in smaller towns and rural India and has an excellent track record.  I have bought this share in the April 2012 for Rs 131 per share and  it is currently trading at Rs 217 ( a 64% return in one year).

This budget has a lovely provision for the middle class – where in first time home buyers get additional Rs 1 lac exemption on interest payments for housing loans up to Rs 25 lacs. What this means is that if you are taking a home loan of Rs 25 lacs, and you are paying a 11% interest, then 10% of this interest will be tax deductible. This will surely impact positively the home sales in non metros and rural areas and Gruh Finance is well positioned to capitalise on this opportunity.

So I would recommend that you buy this share – I am investing in it at the current levels.

How do you find what you are passionate about? – Part 3

Henry Ford once said -“Thinking is the hardest work there is, which is probably the reason so few engage in it.”

And here I am, trying to make you think.

I hope the questions in my last two blogs got you closer to finding out your passions.  I hope you wrote down the answers to the questions that I had asked in the last two blogs – the questions were:

1. What are the various things you are or were  passionate about;  and
2. Go back and list the moments in the past when you experienced a sense of flow

Today, I will share one more area, where if you think hard enough, you will get a feel of what you are passionate about.

I am listing below the four most common aims in life that all of us share. These aims will have some linked passions or goals or desires for each one of us. Introspect the  passions or goals or desires for each of these four aims and list them down.

The four aims are:

1. AIM 1 - Achieving physical health and pleasure – please list at least three passions or goals or desires around your aim of achieving physical health and pleasure.
2. AIM 2 – Build wealth, home and family – please list at least three passions or goals or desires around your aim of building wealth, home and family.
3. AIM 3 -Seek to become a better person– please list at least three passions or goals or desires around your aim of seeking to become a better person.
4. AIM 4 – Find your greater purpose– please list at least three passions or goals or desires around your aim of finding your greater purpose.

For example, in my aim to “become a perfect person”, I have a goal of helping at least one person every day in some way.  My act of teaching (I am a faculty in an MBA institute) helps me meet the goal as I am helping many students become better professionals and better human beings. And teaching is my passion as well. So by following my passion of teaching, I am fulfilling one of my aims -"to become a better person".

In a similar way, introspect and try to figure out what your passions, goals and desires are around these four aims.

I am giving you food for thought – I hope you really think hard about these questions. 

Thinking is hard - but it is truly rewarding.

How do you find what you are passionate about? – Part 2

In my last note, I had shared one of the ways to start answering this question. I spoke about making a list of ten possible passions and picking the top five - examples here could be music, teaching, jogging, cycling, cricket, travelling etc

I also talked about makeing a list of ten possible values (that matter to you) and picking the top five– examples here could be honesty, integrity, excellence, respect for others, helping others, etc

If you have gone through this exercise given above, then I would like you to think of “flow states” today.

Flow states occur when your mind is so occupied in the activity that you lose a sense of time and space. There must be instances in the past when you were so involved with some activity that time flew past – you were not hungry, you did not feel tired after the task - infact you felt elated. These are flow states.  When you were in the flow state, you were loving what you were doing.

So here is the task – take a pen and paper and sit in a comfortable place and switch off all distractions and introspect – spend time going back to all your good memories – list out the various times when time just flew by – when you were in a flow state – ask the three questions given below and keep noting down your answers.

List the moments in the past where you experienced a sense of “flow”?

What activity gave you flow?

What passion or purpose does this point to?

Thinking about your past flow states is not all that difficult - these are moments that you surely remember with a smile on your face– these are good memories.  

The list made by this exercise would  point you to your likely passion and purpose.

My next few blog posts will list out further questions that would help you figure out what you are passionate about 

 

Finding your passion and purpose -part 1

There is lot of stuff being written about money and investing and I would like to change gears and direction a bit.

The question I would like to ask my readers is that if you have enough financial security to retire in your 30’s or 40’s, how would you spend your remaining life?

What would you do from 6 am till 10 pm daily if you did not have to really go to work?

To paraphrase it differently - what are you passionate about? what is it that you wouild love to do 12 hours a day and not feel tired? What drives you?

These are questions that are easy to ask – but difficult to answer.

I believe that finding your passion is not a “nice to know” thing – it is a strategic requisite as you move towards financial independence.

In my case, it is this dream of living my life by doing what I am passionate about,  that drove me towards financial independence and now I am doing what I am passionate about - I teach.

 If you can find your passion, then you will be driven towards financial independence.

So here is the question – how do you find what you are passionate about?

In the coming weeks, I will share a few pointers , a few questions, a few templates. Take some time off to introspect on the questions that I ask  - write down the answers– keep your notes safe – revisit them as often as you like. 

As you follow my blog for the next few weeks -  you will get some sense of what you are passionate about – hopefully.

So here is the starting pointer - Do not look for one passion.

Each one of us has a variety of passions within us –you will have a number of dreams. You may want to be a rock star and a farmer and also be a world traveller. You may love science fiction too. So do not restrict yourself to just one passion.  Each one of us is passionate about multiple things.

Also, do not try to define your end goal –try to define your direction, your values instead of goals.

So here is the first template:

Make a list of ten possible passions - of these ten; put a star against those five that seem to resonate most powerfully with you.

Make a list of ten possible values that matter to you - of these ten, put a star against those five that seem to resonate most powerfully with you.

Here is a short video that I would like you to see -  http://youtu.be/Jb6thtmfveE

Here is an investment opportunity for my readers

You need to read this note till the end to get to the investment opportunity.

Unlike stocks, identifying land to invest is comparatively easy in India. Due to urbanisation, most urban lands would appreciate in value by at least 15% per annum as long as the titles are clear.

Here is how one of my friends managed to make a great ROI.

Having worked in the IT industry in Bangalore, this person had Rs. 1.9 lacs ($3650) in his savings account. All of us know that this amount is not enough for investing in land in Bangalore.  However, unlike most of us, he decided to do something about it. He sold some gold (worth 1.5 lacs / $2850), took a few bank loans (8 lacs / $15400) and saved aggressively for two months (another 0.6 lacs /$1150) - he thus managed to have a capital of Rs 12 lacs ($23000).

When you need funds – they say you can go to FF – FF stands for “family and friends” (there is also FFF - it stands for family, friends and father-in- law). So this friend of mine followed the FF route – he borrowed Rs. 6.25 Lacs ($ 12,000) @ 10% interest cost.  Most of these loans were for one year duration.

So starting with Rs. 1.9 lacs ($3650), he managed to get ten times that amount - Rs. 18.25 lacs ($ 35,100).

As he was arranging funds, he also identified cheap BDA plots (BDA stands for Bangalore Development Authority and the plots sold by them are legally clean and hence safe and easy to sell).  Unlike most of us, he took the route of the smallest plots available (20*30 ft plots) -he  identified two localities in the outskirts of Bangalore – and  he bought two 20*30 ft plots  of land between Feb 2012 and April 2012. His logic of buying the smallest plots available was that most plots are 30*40 ft or 60*40 ft and hence these small plots would be a rarity and so will have lower competition while selling (and he was right). He registered the two plots for a total of Rs 24 lacs ($ 46,100). As he fell short of funds, he enlisted another friend, interested in investing in land, as a partner for 50% share in one of the two plots for Rs 6 lacs ($ 11,540).

As he had to pay back the loans after one year, he put the plots in the market within six months of buying them. To his surprise, the prices kept going up every month.  And finally in December 2012, he sold the two plots for Rs 33 lacs ($ 63,460) - so within nine months, by investing 24 lacs, he got Rs 33 lacs – he made Rs 9 lacs ($17,300) – that means the land price appreciated by 50% on an annualised basis.

Does it look good – I am sure you will be nodding a YES (so am I)

What he did well – The best learning for me is the way he managed to get the funds – this just shows that there is always a way.  He also was creative by going with the smallest plots sizes available – he had segmented the markets and was clear that he will have a higher negotiating power with this segment. He also identified safe and legally clean plots, he identified good outside locations, he used lawyers and brokers (they are needed for any real estate deal in India) and he acted decisively (many of us will take longer than him to act).

What he could have done better – well, he took one year loans – he should have taken a longer term loan as the cost of capital was only 10% per annum and the price appreciation was 50% per annum. Also this transaction will attract short term capital gains tax in India – he will end up paying 10-30% of the gains as tax. Ideally he should have managed to keep his FF at bay and kept the land for 3 years and then exited – post three years, the taxation is lesser as it is a long term capital gains tax.

For more information on investing, you can read at my book -"How to get rich and retire early" (available on flipkart and homeshop18)

So finally - here is the investment opportunity for my readers – if you want to join with this enterprising friend of mine – either as a equity partner or as a debt– he is looking at the next set of plots – he surely needs more funds and even though he may not get the 50% annualised returns, I do believe he will surely get 25% plus returns. If you want to participate, please do write to me at rajasekharan.sg@gmail.com and I will introduce you to him.