starting the road to riches : Change misconception first

I was somehow always being taught that I should study to get good grades so that I could get
good job and have a secure future and it made me wonder how my grade would made me a rich
person. I mean everywhere I saw there were highly educated people but all I saw on their
homes were recovery agents of banks, meaning they could not repay their debts, well I
wondered if these people, in spite of being so intelligent and smart cannot avoid being thrown
out of their own homes and being poor, how would I do the same. I did saw a couple of people
though who did not appear to be doing anything yet they were enjoying life to the fullest, in my
opinion they were supposed to be poor not the hard working convent educated intelligent guy.
Well I got the answers, and they were surprisingly simple yet surprisingly efficient.
Simplest plans are often the most brilliant.
Before I tell you about the answers , let me give you an example, suppose you take a home
loan from a bank, and they give you 20,00,000 in loan money for which they charge 12%
interest, I t will turn out to be 2,40,000 a year as interest, meaning 20,000 a month, now
suppose bank charges you 20,000 a month as installment and you have choices of 2 banks, one
adds interest to the principal at the end of the month, AFTER you have used the money for the
month and another who charges you interest before the month for which you have availed the
loan amount, on paper both look the same because according to the salespeople of the bank it
doesn’t’ matter when you are paying the installment , at the end of the month you still are
liable to pay 20,000 as interest. Well look again.
Let’s calculate both, first bank levies interest on 1st of every month, Before you have a chance
to pay interest and before you have used the money for that month.
So first month, your liability is 2020000 and you repay 20,000 on first of month your liability
is still 20,00,000 next month again the same so 1 year later you have repaid, 2,40,000 with the
full principal still standing. Now take the case of bank which puts interest at the END of the
month after you have used the month for that month, so you have liability of 20, 00,000 at the
start of the month, you repay 20,000 and your liability Is now = 19, 80,000 now add interest to
that: 1% of 19, 80,000 is 19800 and NOT 20,000 add the compounding effect we have already
seen and you have a total benefit of over you can imagine. Of course there are minor
differences in real life to this for example; your installment in both the cases is going to be a bit
more than the 20,000 in order to cover the capital repayment too. But think,
Nature has give you a portable supercomputer in your head called the brain USE it.
The problem with the world is that the education being provided is still the education that was
required when INDUSTRIAL age started, and when I say education is old I don’t mean the
content of subjects that are being taught, but the subjects themselves.
There have been four main education ages that existed in the world; first one was pre 3000 year
old education that was taught by parents to their children which was how to make a fire, how to
kill an animal. How to make a home. At the start of the millennia (about 2000 years ago, 3500
years ago in India and Egypt) due to rapid development of society, requirement of an
individual to learn the mentioned skills like hunting/growing the food, making the house etc
ceased because there were people who did that for you. So now to grow, new demands and
supplies were starting, which require special skills. Those skills can be put into four broad
categories, like first category was – education, research, priests, doctors and all those things
related to that. Second category was that of power like that of soldier, politicians, ruling class
and likes, third class of people were like the economic class of people like traders, farmers,
prehistoric banks and likes, fourth class of people were like the slaves , servants, laborers of the
times. All were being taught skills related to their jobs and more importantly skills and most
importantly the CHARACTER. In the industrial revolution of 1600’s and after that, a new type
of education emerged which was required at that time, and which tried to convert the people
into generic workers who could be molded into any role. And now we are again at the cross
roads of the worlds, we are again changing the age of the world from an industrial economy to
essentially an paper economy, (well tell about this later)
One of the worst thing that modern education did was making everyone stop asking questions.
they started teaching the syllabus which said this is right, and that is wrong. Not the character
of the thing but merely because it has been said so in the books, learned men have written it so
you should not Question it. There is a huge difference in the two statements
Aliens don’ t exist
And
So far we don’t have any evidence of aliens.
First statement tells the person in subtle ways that we have evidence that aliens don’t exist,
while it’s the other way , we don’t have evidence of them existing. First statement switches off
the thinking part of brain while second statement forces one to think how can I find the aliens
or whatif or a million other possibilities.
Can you recall last time something new was invented?

3 FORMULAS of Making money

There are 3 universally recognized formulas of making money. ( notice I have written making
money and NOT getting rich.)
Job income
Rental income
Paper asset income
Job= anything that requires your time in order to generate income. Doesn’t matter if it is a
multi million dollar business or a small 9-5 clerical job or a farming work.
Rental income: this is the income that is acquired through giving something of value to
someone who is willing to pay a price to use it. Most of the people limit it to houses and
commercial establishments. I have used the word value in it, not land or property. Let’s see
some other things of value that might be converted into rented value, a car if put up as a taxi, a
person whose services can be rented out to other person or company temporarily and a
thousand other things, which you should think of yourself.
Paper asset: these are the things which are just papers which entitle the holder of the paper to
something of value, like various financial tools, bonds, mutual fund units, insurance units,
Job: the most positive thing about a job is that it gives money right now, which most people
cannot avoid because delayed result is not existing in our culture anymore., second is that it
gives maximum share in value, that is if the job creates 100$ , you get to keep 60% of it, which
is almost too irresistible to avoid, since it gives the feeling that they are getting richer.
But why then do I find that most people are not rich, or wealthy. Because of simple reasons.
First you cannot grow by being in a job, there are just one in a million who get where they
want to be, and one to a million is not an odd I am willing to take, it’s worse than a lottery.
Second, no matter how good you are at your job, you are still getting a part of the earning that
your job makes, nothing else, the key to getting rich is taking a share of everyone’s earnings,
no matter how small, do you know about a few who take the smallest out of your earnings, yet
become the richest, let’s count, shareholders of the company, your supervisors, they
supervisors, their managers , their regional managers, their country heads, and then ceo.
Rental income: this is the income, which one gets by buying or having some sort of value in a
product or something and leasing it to someone who otherwise might not have been able to get
that value either due to its’ unavailability or it’s high cost. Example, someone needs a car, you
lend it to him for a fare, you get rental for the period. Can you recall any more rental incomes,
parking space for the cars (right to use that space for some time), or road tax or toll tax, right to
use the road for that time, or a building whether commercial or residential, that gives you a
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rent, ( incidentally the money is also put on rent, rental of which is called an interest, just a
food for thought ) are the financial things which basically mean you own a part of
something of value, and you shall get the part of that value generated, this could be anything,
from a mutual fund unit to a interest bond, to a thousand different types of financial tools
which you’ll know of when you enter this maze of financial world. These are actually the worst
of the three because they actually rarely generate any value merely show it as such however it
is preferred by people owing to it’s high liquidity.
When I meet my clients to discuss their financial needs, very often they ask me, how can they
be rich without much capital to invest, and I tell them it’s actually very easy, just change your
mindset and you’ll not only be rich in no time, but Stay rich as well.
Their second question is, well how do we change our thinking? I simply give them an example,
suppose you have two cars in front of you one costing 20,00,000 and other one costing
2,00,000 and you have 20,00,000 with you, which one will you buy, and usually the answer is
the one with 20,00,000 Well I say suppose you are in a financial trouble, which usually comes
when you are feeling the best then what would you do, and sometimes they say my car is worth
20,00,000 I can sell it. I tell them it was worth 20,00,000 when “you wanted “ it, the moment it
came out of the showroom and “you need “to sell it, it’s not worth more than 12,00,000 so
essentially a super loss of 8,00,000 ? Wouldn’t it be good if you buy a car worth 200,000 and
invest the rest in monthly interest bearing bonds, which provide you with enough money to
cover the cost of running the car as well as complete maintenance, no matter you have a job or
not, and which can provide you with something should you go in some financial trouble? Isn’t
that better than a 20,00,000 white elephant which is a constant drain on your salary or earnings
like insurance, maintenance, petrol?
At least I make them think.
People say study, so that you will get good grades, and with good grades you will get a good
stable job, and I prefer to say study so that you will get good grades, so that you can own the
best businesses.
It never took money to get rich, it always took brain to be one, in Hinduism it is said that
money is a naughty girl it moves from fools to smarts. fate replenishes the fools again and
again yet it moves from fools to smarts again and again.
There is a difference between smarts and intelligent,
In real world,
If you ask a intelligent person what is 1+1 his answer is going to be 2
If you ask a smart person the same question, he would ask back, how much do you want it to
be?
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Suppose you say it want it to be 1.5 he would say well 1+1 is 2 but government took his share
hence 1.5 if you say 3, he might say 1+1 is 2, and govt gave you incentive to provide locals
with jobs. Apply mind.


One of the most profound quotes in my life has been: deal with life as it works not as you
hoped or wanted it to work.

The key to being rich is in understanding the difference between liability, asset, income and
expense.

You have already read about it. Let’s go through it again, what you earn on a monthly or
weekly basis is income, what you spend on monthly or weekly basis is expense, what
increases your income is asset and what increases your expense is liability. Read last three
lines a hundred times until you understand the meaning behind it.
Money is not evil, absence of justified money is the root of all evil (just a random quote)
One of the best advice that I can give to you is, don’t work for money, if you do that you will
continue to work for it for the rest of your life, and still never be rich.