Get rich doing nothing!

By Yogesh Chabria 

 

A year back, a friend of mine sold some ancestral property and hit the jackpot. She asked me to help her invest it in stocks.

Being totally new to the stock market, she  thought she would need to watch a business channel throughout the day, and carry a laptop, so that she could trade all the time!

 

Now here's the surprise bit. I didn't allow her to do any of that, and told her to pursue a hobby, take a holiday, meet her family, start a business, or do just about anything -- except trade.

Invest and wait

I strongly believe that investments aren't meant to keep you busy; they are meant to make you rich.

 

She took my advice and invested her money in a few companies that had strong fundamentals and a visible growth. I wanted her to stop worrying about fluctuating prices every day.

It was better to let her indulge in other things than get paranoid at every move in the market. This would help her stay invested for a longer time and let the money grow along with the invested company.

By doing nothing, her investments fetched around 95% returns in a single year itself. Within a span of seven years she will surely be much richer than what she is today.

Get rich, not busy

By doing nothing, she saved time and also the cost involved in the form of brokerage. This helped her stay put despite the temporary falls in stock prices.

She did not fret when her stocks fell by 10%, nor was she greedy when it rose by 30%.

 

All this can be achieved only if she doesn't do anything, and avoids constantly buying and selling her shares.

Many people make the mistake of looking at stock prices every 30 minutes.

And with the slightest rise of 10% they begin to sell and panic with even a fall of 5%. These people won't get rich. They will just be busy.

 

Relax like Warren Buffet

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 constantly. A large part of your money should be invested and not touched.

One of the world's richest investors Warren Buffet 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, just stick to a fundamentally strong company which has growth potential ahead, and then, do nothing.  

 

Now I don't want husbands, wives, teachers, parents, children or your boss suing me for telling people to do nothing.

So, here's my disclaimer: My advice about nothing refers very specifically to your investments and not other areas of life!

 

Yogesh Chabria, an investor and trader, runs GSIFS.com. He is also an author & educator and is presently working on a book on success, happiness and motivation. He can be reached at yogesh.chabria@moneycontrol.com