Smart ways to invest and attain early financial freedom

Warren Buffett is the greatest investor of all time. His decisions about buying shares and companies have beaten the stock market year after year and made him one of the richest person in the world. As far as I know, there are only two documentaries on Warren Buffet – where he has collaborated and helped them during the production – one from BBC a few years back and one from HBO that was released ten days back. The one released by HBO was keenly awaited by his fans for more than six months. This documentary traces his life from his early childhood days, to his college days, his marriage and his kids and the way he started his investing journey and the way he has decided to give away most of his $73 Billion to charity. The documentary has some very rare family photos and videos. It has focused on him as a person and his humble lifestyle and clearly shows what an independent thinker he is. But the documentary does not share how he identifies his investments.

Meeting two such people in the same day is not normal – but I guess I was lucky to have had these meetings on the same day. Let me start with the story of the person with 98 flats – let us call him Ravi (that is not his real name). He is a simple soft spoken guy. Met him at a friend’s place. His father had bought four acres of agricultural land in the outskirts of Bangalore in 1991 at a cost of Rs 35,000 per acre (this was around my annual salary after my MBA in 1989 – so this investment was equivalent of my four year’s income then and I was in Bangalore in that period – so I could have also done the same if I had the foresight then). This land was bought purely for agricultural purposes and the family did farming in the land. Around 1995, the area where this land was situated became Electronic city. The govt acquired neighboring lands and allotted it to companies wanting to establish factories in that area- a few software companies too bought land and am

  Here is a nice post that I would like share - agree with it fully. May be this list is not complete - but all fourteen are habits of people who accumulate wealth.

Friends - I read a lot of blogs daily and I would like to share this story that I liked today. But before that - The easiest and surest way to build wealth is to have a mind set of investing for long periods - typically ten years and above. Out of experience I can say that it is very easy to make 20% plus ROI compounded in India, if you look at a ten year time frame. As the time frame goes down to 2-3 years, it becomes more and more difficult to make 20% ROI consistently. Also, the power of compounding kicks in over longer periods and that truly builds wealth ( as you will read in the story below). Let me give you an example - here is the HDFC Bank share price for the last ten years ( I know, you may not be investing through shares - but this is just an example).The light blue line is the HDFC Bank share price and the dark blue line is the BSE Sensex. You can click on the image to enlarge it.

Friends - I do a lot of reading daily and I would like to share some of good content, that I think will add value and over time make you richer. Peter Lynch is a legendary investor who retired in the 90's. For over 20 years, he managed Fidelity's Magellan fund in the US, which gave around 29% ROI per annum under his stewardship and was the best performing fund worldwide in that era. In his book "One up on Wall Street", he shares his stock picking style. The book is very easy to read and gives one a very good idea of how the mutual fund industry works and how one should identify good companies. Highly recommended book for those who invest in stocks and mutual funds.