I used to track my expenses religiously for 8 years – initially using notepad and Excel, later with GnuCash.
In 2011, when I started my own company, time became a limited commodity. I found it hard to keep track of my expenses. So I devised a simple minimalistic method to track my expenses – one that took just 15 minutes every month.
It’s been exactly 4 years since I quit from my last job. This morning, kept pondering over the years gone by.
4 years is a long time. I’ve had my share of ups and downs. Here’s a
short long note on how things have been so far.
The 1st Tapprs office, Basavangudi
My idea behind quitting the job was to explore an entrepreneurial opportunity. To see if I had it in me to be an entrepreneur, if I could learn the ropes, if I could build a business, make it sustainable and possibly scale it up.
Charlie Munger often says, “tell me where I’m going to die, so I will never go there”. Avoidance of terminal risk is of great importance to him (and to Warren Buffett).
That is a very important thing to follow in life.
A Russian roulette is one game that is simply not worth playing at any price, even though the odds are in your favor. (There is a 5/6th chance that you will survive and there is a 1/6th chance that you’ll get the bullet, if the chamber is reset every time.)
Any game that can get you killed is just not worth it! Even if there is a good chance that you might survive and win a hefty prize.
“I want to be financially free, so I can pursue whatever I want in life”. I hear this statement often.
A friend and I were discussing money and financial freedom, amongst other things in life.
“How much is enough money to be financially free? How do you decide?” I asked my friend.
Is it a fixed number? The ability to not work for money and have enough of it to pay all your bills through your lifetime? Or is it 30 times your annual expense? 50 times? Having a good part of it in inflation beating investments? Or having a business that has good free cashflow and longevity?
For several years, I used to track my expenses religiously – partly because of my interest in personal finance and largely because I have an OCD on maintaining data, esp numbers.
From 2003 until 2007, I used excel sheets to manage my accounts. From 2008 onwards, I used Gnucash. Whichever the system or tool, the data is only as good as the data entry. And that can be time consuming! By 2012, I was pressed for time and it no longer made sense for me to track my expenses so religiously. Especially since I had good control over it and roughly knew my numbers. (I realized its way better to spend time on investments than on expenses.)
A few months ago, while reading Buffett’s annual letter, I came across 3G Capital and its principals, mainly Jorge Paulo Lemann, and got curious.
This article on him that made me more curious.
Now, Buffett is an astute dealmaker. And fantastic at picking partners in business – nearly all his partners are people with outstanding characteristics. Few examples are Charlie Munger, Tom Murphy, Mrs Blumkin, Albert Ueltschi and Ajit Jain. Even the lesser known people like Ted Weschler and Todd Combs are ones I’ve come to admire a lot.
I just realized its been exactly 10 years to the day since I first entered the stock market. Being risk averse and skeptical, I equated stock market to casinos and thought I’d never touch it with a long pole. Little did I know that a large part of my own life would be devoted to studying and investing in that very same treacherous market.
The date was May 17, 2004. A senior colleague looked very pale and I came to know that he had lost a lot of money that day in the crash. I was perplexed as to why people invested in risky things such as the stock market and vowed that I would do no such stupid thing.
Running a business is like being in a gorge. Your visibility is only upto the next curve.
Last year, in June, I liquidated most of my debt investments thinking that I would invest it in my own company.
In that period, I also read this book – “The Outsiders”. I really liked the modus operandi of the entrepreneurs featured in the book. They were all capital allocators and had done very interesting things – many a time going against conventional ‘grow big’ logic. Those guys often would ask themselves, “which is the best option to put my next Rupee into?”. They would always seek an edge. And got out of businesses with leaky-boat economics. And invested heavily into businesses where they could build more competitive advantage.