The ethics of money and business

Ever since 2005, I have really enjoyed studying businesses and have kept my money mostly in publicly listed stocks and since 2011, been interested in building one myself. At the same time, I love and seek inspiration from nature.

I’ve had trouble keeping them together because capitalism and its main cogs – business and finance, seem to be largely working against nature. I find it disturbing and hard to balance.

Several years ago, I owned ITC shares – a friend questioned how I could make money from smoking and tree-chopping (paper). I got out (though my reasons are ambiguous at best).

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Side project: Simple expense tracker for busy people

busywallet

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.

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Never play the Russian roulette

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.

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True financial freedom

“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?

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Track your expenses without sweating it out

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.)

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12 things I learned from Jorge Paulo Lemann

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.

lemann

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.

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A decade of investing

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.

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Growing the root

I read this statement by Rahul Dravid in an article and loved it. It’s similar to this post I wrote a while earlier.

“When I’m requested to speak to youngsters I like talking about this phase of my life and liken it to fascinating plant: The Chinese Bamboo. You can take a Chinese bamboo seed and plant it in the ground, water and nurture the seed for an entire year & not even see a single sprout. Infact, you’ll not see a sprout for 5 years. But suddenly, a tiny shoot will spring from the ground. And over the next 6 weeks, the plant can grow as tall as 90 feet. It can grow as fast as 39 inches every 24 hours. You can literally watch the plant grow.

What was the plant doing during these 5 years, seemingly dormant period, it was growing its roots. For 5 full years it was preparing itself for rapid, full growth. Without this root structure, the plant simply couldn’t support itself for its future growth. Some would say the plant grew 90 feet in 6 weeks, I would say it grew 90 feet in 5 years & 6 weeks”

Bootstrapped & being incremental

After I quit my job in 2011 (March), I had little idea about what to do next. I thought I will experiment a bit and see whats in store for me.

I knew I was done with working for someone and wanted to see if I had any capability in building a business – any business, size or industry didn’t matter much.

Things were hazy. I had several half-baked ideas. Tapprs is one that worked out okay.

Tapprs:

Tapprs was never really my primary idea – since it is capital intensive, I kept resisting it. But all my other ideas failed to gain traction and I kept getting deeper into Tapprs and it started doing significant revenues. Natural course took over, esp after some inspiration by Lensrentals.com CEO Roger Cicala.

At Tapprs, things weren’t based on rocket-science. We simply paid attention to:

  1. taking care of customer well
  2. being fair and honest with employees and other stake holders
  3. putting business interests ahead of personal interest
  4. not taking short-cuts
  5. being fanatic about processes, systems, inventory & money management

That shows on the dashboard below, at least a bit.

metrics

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