What do you really want?
Hello Folks,
It has been a long time since my last post, and it feels great to be able to write again.
Life as usual caught up to me and made me change my priorities. It happens to the best of us, and I think that’s okay. Our priorities keep changing with circumstances, so as long as one keeps coming back to what matters, momentarily lapses in important aspects of life are okay.
Onto today’s, post…
If you have been investing in the markets or like to read about investing. There is no way you wouldn’t have heard the name Charlie Munger—the legendary Charley Munger, partner of Warren Buffet, known for his witty and wisdomful investment advice.
One of the famous ideas popularized by Mr. Munger is a mental model named Invert.
“Invert, Always Invert!” - Charlie Munger
The model is simple. It proposes to look at a problem from backward. For instance, let us take an organization that wants to get into a new line of business. Now one way to approach that problem would be to look at the list of all available opportunities out in the market and go with the one that seems promising at the cost of not fully understanding the business. The other way would be to consider the organization's strengths and weaknesses and determine which business would best synergize with their existing ones and give them more leverage. It’s pretty obvious, right? Play where your strengths are.
The model's power lies in guiding you toward what you don’t want from yourself, your life, your job, your business, or anything else you can think of.
Morgan Houssel in one of his posts writes about “Reverse Obituary”. He mentions how one can lead thier lives by thinking about what they want to be said about themselves in thier obituary.
He States “ Everyone’s will be different, but I suspect most people would want their obituary to say: You were respected. You were admired. You were helpful. You were a good parent, and good spouse, and a caring friend. You were an asset to your community. You contributed to your industry. You were wise, funny, and smart.”
I bet most of us if not all would want to be remembered more or less by the same word above. Practically no one would want to be remembered by the kind of car they drove or the size of thier house.
If you think about this model for a bit, it has the power to show you the path you wouldn’t want to take in any problem you face.
Want to be remembered as a kind person, it’s simple, stop being rude to people and practice more kindness
Want to be remembered as a great father? Easy again, spend more time with your kids and less time in front of your desk or TV.
Want to be remembered as a successful long-term investor? Easy again, stop taking short-term actions.
The principle can be applied to your life and also help you decide the kind of investor you want to be.
Ask yourself, how do you want to be remembered?
Do yo want to be remembered as some one who invested for the greatest wealth possible, the best informed, the best chart reader, but had no time for important people and other stuff in his life?
or
Do you want to be remembered as an investor who invested to achive all the important goals in his life, while makeing plenty of time for other important things than money in his life?
Until next time..
I am on a mission to change the way people think about their money and Investments.