It really itches when someone still asks – What’re your new year resolution for 2020? I too have a long list of resolutions (regrets) which I could not fulfill. My view is – mind is made to bluff you! It can make you form a resolution, think of ways to break the resolution, fill you with regret & then say – “Next Time, for sure”.

So instead of making a new year resolution – let’s develop some long term mantra to tame this mind!

Let’s tell our mind that – “I am a step forward. Instead of this yearly bluff, let me form a bigger goal in life. Possibly for a DECADE.”

Here are some pointer for a new year resolution – focus on DECADE

“Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did. So throw off the bowlines, sail away from the safe harbor. Catch the trade winds in your sails. Explore, Dream, Discover.” – Mark Twain

Rule 1: I will follow simple rules of Babylone (As described in the 1926 book The Richest Man in Babylon by George S Clason)

- I will keep at least one-tenth of my earnings for my future & family.
- I will seek advice to invest this money, from a professional, whose primary work is to manage money. (looks like ME Advertising – but the book author writes this in 1926!)
- I will not speculate, invest in unpredictable outcome business & where the loss of capital is a surety. I will guard the wealth.

Rule 2: New Year Resolution – I will be prepared for this decade. Will Not Depend on being Lucky & Over Confident.

If I am unplanned & still successful in investing (very less possibility, but exceptions exist), I will attribute my success to LUCK. I will move on with this initial success or this “Survivorship Bias”. This time I will be ready with knowledge… with a plan & with some action.

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As Nassim Taleb says – A Russian Roulette survivor cannot be a role model for society or friends. Russian roulette is a game very much like Gabbar played with Kalia & other 2 fellows in the epic movie “Sholay (1975)”. But the difference in Russia & Ramgarh is, in Russia, the players are given a gun with one bullet in the chamber & if you survive you get millions. Will you seek advice or follow this millionaire?

There is the term “false positives” in pharma industry for this. This means if a person has cancer, the testing drug will give a negative (positive for the patient). The patient will not go under treatment thinking himself to be healthy and eventually will find himself on advanced stages of the dreadful diseases.

In Investing “False Positives” are very common. But they result in Over-enthusiasm & Overconfidence. Remember … Reliance Power, IT Bubble, Sub Prime & most recently Bitcoins.

Rule 3: It is very easy to sell when a seller shows the outcome. Few examples:

12 % of the large-cap fund.
15 % from a PMS.
18% from a small cap fund

I will not get carried away by OUTCOMES. I will ask the PROCESS. I will ask the RISK involved.

Will I survive, the 40% fall in smallcap? (Yes it has fallen more than 40% on 3 occasions in past)

If I need just 8% to fulfill my goals, why is my advisor even suggesting a SMALL CAP?

I am told to DIVERSIFY to MINIMISE RISK… First thing? Do I need to take the mentioned RISK?

Rule 4: I will differentiate between MONEY & WEALTH

Money can buy comforts. Wealth ensures FREEDOM.

Many are still in the cycle of Money.

Dedicate this decade for Wealth.

(Decade & not a year or a month… You are not in Vegas. Jan 1, 2020, and days after that will be as same as the old days. Same family, place, office & same old habits.)

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Simply come out of the pressure to do well this year…

Divide “to do well” phrase in the years of this decade. Make a plan. Take yearly reviews & see if you can achieve it.

Rule 5: I will develop the ability to Manage Stress this decade (Reducing or Eliminating Stress is a myth in the real world)

Stress results from:

Certainty – My daughter growing old, need to fund her college. I am living on rent & need my own home in 2-3 years.
Uncertainty – Trump may win again. I may see the worst days in my job. I am 40 & “in the zone” for Diabetes & BP. What should I do?

Some things are bound to happen. More you think about them, more you are sick of them because it reflects your indecisiveness to PREPARE.

In investing or life, you need to keep things simple. Simplicity can take away stress. (Most of the investors of PMS just need MFs or NPS, but still, they buy “Stress”.)

New Year Resolution & Simple Solutions:

You have less income – It can be countered by increasing sources.
You have a threat to income due to changes in technology – it can be reduced by improving skills.
You have a body which is wearing – this can be handled by proper Insurance & following a healthy lifestyle.

I was hearing a video of a spiritual guru & he said,

“The moment you say you do not have time for the most important things in your life, you are increasing stress. You will not start walking & exercise until – one morning you will a slight pain on your left. You will go to a doctor and he will say your heart needs an “embroidery”.

Then what is the point in walking with embroidery done, patched heart?”

New Year Resolution is Manage Stress by Un-focusing & Focusing – at the right time.

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Solve the Biggest Financial Regrets of Last Decades

Cautiously using the word “Financial” – For professional & personal – I may or may not be the right guy!

Something has bothered us financially in the last decades or last few years.