Sometime ago markets were falling and people were talking about selling everything and doom. Now once again markets are rising and the same people who told you to sell everything a few weeks ago are talking about buying. I feel irrespective of where markets are certain principles and concepts remain universal. That is why I have decided to share something from my latest book ‘Invest The Happionaire™ Way’ which will help you understand the importance of long term investing better.

Get Rich Doing Nothing

I’m sure most of you might be wondering if it is really possible to get rich by doing nothing. Some of you might even be thinking that I have surely lost it.

That is what one of my close friends, who was taking my advice, thought. She had received a sizeable amount of money after selling some ancestral property around a year ago, and wanted me to help her out with it. It was the first time she was investing in the stock markets, and like most other people, thought that she would spend hours a day, carrying a laptop, trading in stocks and watching business channels. She wanted to be busy with the stock markets.

Fortunately for her, I didn’t allow her to do any of that. I asked her to pursue a hobby, go on a holiday, meet her family, start a business, perform community service or do anything else to keep herself occupied. The stock markets aren’t a great place to be “busy.”  I strongly believe that investments aren’t meant to keep you busy; they are meant to make you rich.

Based on my advice, she invested her money in a few companies that had strong fundamentals and a visible growth. I told her to stop looking at the prices everyday and tracking daily upward and downward movements. Just staring at stock prices would not magically make them rise.

Instead, doing nothing about them would allow her do other things, while the money she invested grew gradually. As the company grew, her money grew along with it too. By doing nothing with her investment, she saved time and also the cost involved in the form of brokerage that she would have incurred had she constantly bought and sold stocks.

By doing nothing, she didn’t get scared of temporary falls in stock prices. She didn’t get nervous and sell her stock when it fell by 10%. When the stock rose by 30%, she didn’t feel greedy and sell it either. She didn’t even know about such minor falls or rises.

By doing nothing, her investments gave her returns of around 95% in a single year. With time, this will keep increasing. Within a matter of seven years, she will certainly be much richer than she is today. All of this can be achieved if she does nothing – if she doesn’t constantly buy and sell.

Many people make the mistake of looking at the stock prices every thirty minutes. Just a small rise of 10% and they sell. Just a small fall of 5% and they panic. These people won’t get rich. They will just be busy.

Investments in the stock market are like seeds. They will grow into trees only if you give them time. If you keep removing your seed and changing soils every other day, your seed will remain a seed.

Don’t get carried away by brokers and people telling you about “smart” trading continuously. A large part of your money should be invested and not touched. One of the world’s richest investors, Warren Buffett, doesn’t care if the stock markets were to be closed for the next year, because daily stock prices don’t influence his investment in any way.

If you want to be rich, simply invest and do nothing. Just stick to a fundamentally strong company that has growth potential ahead.

Now I wouldn’t want husbands, wives, teachers, parents, children or bosses suing me for telling you to do nothing, so just a disclaimer: my ‘doing nothing’ advice refers very specifically to your investments alone and not to other areas of life.

Time is the best friend of a good, fundamentally strong company. These are just a few of the wealth creators. Infosys - An investment of Rs. 10,000 in 1993 would be worth over Rs. 1.5 crores in 2008. Unitech - An investment of Rs. 10,000 in 2003 would be worth over Rs. 1 crore in 2008.  Jaicorp - An investment of Rs. 10,000 in early 2006 would be worth over Rs. 22 lakhs in 2008.

- Yogesh Chabria

The author is an investor and bestselling author. You can read about him getting rich doing nothing and much more in his latest book Invest The Happionaire™ Way which is available at major bookstores across the country. You can find out more by visiting www.happionaire.com. You can write to him at yogesh.chabria@moneycontrol.com

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