Hello Investors! What’s up? I hope all are doing good.
I am starting this blog series to develop financial awareness about investing as I believe there is a lack of financial education in India. This blog is specially designed for those who know nothing or a very little about the investing.
Why Investing is Important?
Earning and investing are the two different faces of the same coin. As much as earning is important, investing is equally important. Unfortunately in India investing is not given the same importance as compared to earning.
The Indian education system doesn’t have “investing” in its syllabus.
Getting a good job is considered to be the ultimate objective.
But what after getting a job? No one talks about that. There are good 40-50 yrs of life left in you after getting a job assuming you got your first job at an age of 25 yrs. So let’s understand that below.
The job you are currently doing is your active source of income. It is always recommended that you should have an alternate source of income as well. Don’t worry! I am not asking to do a part-time job here. If you have time then you can very well do that. Here I am talking about passive income. Passive income is generated by investing. In starting the passive income will be very small as compared to your active income but with time (and sustained investment of course) the passive income will become so much that your active income will look like peanuts. How to generate passive income through Investing? That we will discuss in the upcoming posts. First, let’s understand the basics of Investing.
What educational background do I need to be a good investor?
What do you think should be the minimum educational qualification to be a good investor?
First think about it yourself.
Ready with your answer?
Here we go.
“A person who has cleared fifth grade is good enough to be an investor”
The above answer is not given by me but by the most successful investor on the planet & the fourth richest person on the earth Mr. Warren Buffet.
Now again the same question we will ask in a different way to Mr. Warren Buffet and try to get an answer.
“I understand that a person who has cleared his fifth grade is good enough to be an investor but do I have an advantage over others if I am educationally more qualified than them?”
Here, I will brief you about the answer given by Mr. Warren Buffet.
“Education is important in life. If you have done the advanced studies then it may help you to get a better paying job. However, if you are asking me if it also helps in making a better decision in investing then I seriously doubt it.”
Here, what Mr. Warren buffet wants to say is that the problem with educated people is that they concentrate too much on data collection and analysis. This too much analysis leads to more confusion and eventually paralyzes their decision-making ability.
This is called analysis-paralysis syndrome which is largely found in highly educated people.
However, that doesn’t mean that education is not important. But here we are only talking about investing and in the world of investing education is never an advantage.
That’s all I had in this chapter. We will discuss the basics of the Indian stock exchanges in the next chapter.
Meanwhile, I have a question for you.
What are the two major stock exchanges in India?
We’ll start with the same question in the next chapter.
Please feel free to share your queries/feedback below: