Mutual fund investments are subject to market risks.

Please make a decision for your future carefully.

With an all-time high interest (See what I did here!) of the youngsters in finance, I feel it’s the right time to share my two cents on this subject. Being the Bhaiya that I am to all of you, it seems fair that I share my word of advice on how you can get the best results.

Disclaimer: I am not going to talk about which stocks to invest in and which funds to buy.

Do not try to beat the market.

Are you someone who checks the stock values every other minute? This one went up. That one got down. Should I sell this stock? Or should I buy that one? If finance or investing is not your day job, there is a very low chance that you will succeed in the long run. You cannot compete with someone who has gone to school and studied markets all their life. If you think you can beat the market, the Dalal Street or the Wall Street guys can do it better.

So what should you invest (I did it again!) your time in?

Suppose that you have Rs. 1000. You start investing in stocks and buy the best, the most profitable stocks out there. Sadly, you will still make less money than the one who has invested their time in developing skills. Someone who has completed a course and really learned something, say web development, can easily earn Rs. 10-20 thousand for creating a website. You can comfortably turn Rs. 1000 into Rs. 50000 in a month with skills like design, code, etc. But it is extremely difficult through active investment. You may do it once or twice, but it’s very rare to occur.

The easiest way to make money is to learn a skill.

Throughout my career, after the 8 hours of office, I would spend time learning. I would always do more than what was necessary. I would study not just for the office work but for myself. And I remember I was able to make Rs. 1 Lakh over one weekend through a workshop. No amount of stocks can give you this power. We don’t really have this concept of the time value of money. Your growth will be proportional to the time you invest in your skill set.

What happens to the money then?

One can only get good investment returns when one has a considerable amount of capital. As early career professionals, your initial corpus is small. If you are really interested to start early, go for passive investing options like SIP that are not a distraction to your main job. Always remember that a skilled person can earn a lot more capital to invest. So invest your time into making more money through your skills. Then your hard-earned money can be increased by expert wealth managers.

Now why would anyone want to give 2% of their fund to the wealth manager? Because they are putting in the hard work to make your money grow. Ensuring returns on your investments is their headache, not yours. Offload such work to others and do what you are best at. Do you think sportspersons cannot manage themselves? Is it really that difficult? Then why do they keep managers? It’s because they know that they need to focus on being the best in their field, in the top 1%. That is where you need to be in your field.

Focus on improving your skill. Become the finest in your domain. Leave the other jobs to people who are best at them. And most importantly, create the mindset shift of making your fund work for you, rather than you working for the fund.

What’s your take?

I hope this issue gave you some clarity on how to think about investing and finance. And I would love to hear what your thoughts on investing are. Are you a fan of active investing? Do you have a financial plan ready? Share your views in the comments below or on Twitter.

P.S. “The Young Investor’s Handbook” by Govinda Bhadada, a seasoned investor and trader, is now up on Wyzr. You can check it out to get a proper and detailed idea of how to plan one’s finances.