A tale of health and wealth.

For better or for worse, two things that I do regret starting late in life are investing and working out. I was 16 and 17 when I started investing and working out, respectively. Before that, I was wasting my life. Five years into the journey, and I am enjoying every single aspect of what goes into investing and working out. May it be reading financial statements or my health report, meeting some amazing people from the industry or working out with old buddies, running a business or lifting weights, understanding a new business or planning my diet, earning money or losing fat, everything makes me fall in love with investing and working out, 1% more, every single day. It took me quite some time to find out that the only difference between investing and working out is that there is no difference. Warren Buffett once said that I am a better investor because I am a better businessman and a better businessman because I am a better investor. Health and wealth share a positive correlation.  

To add to what Mr. Buffett said, I think a person who is serious about health and workouts can become a better investor and a person who is serious about investing can become a better fitness enthusiast. Starting early gives you an advantage which helps the snowball grow bigger as time pass. This relationship between investing and fitness is so strong that if you forget to pay attention to either one of them, the consequences might cost you something very important, maybe your life as well. Primmest example of this was legendary investor and trader, Mr. Rakeh Jhunjhunwala. If you listen to his interviews from the 90's as well, you will see him talking about his health, but he never took any action, costing him his life at the age of 62. That's when the compounding actually jumps into the stratosphere. 

What is the point of having $5 billion in your bank account if you need someone to push your wheelchair or assist you to undertake day-to-day tasks? I have experienced some amazing advantages of investing and working out over the last 5 years and have literally experienced my workouts improving me as an investor and vice-versa. So, let me sprinkle some interesting insights on this topic, hoping that it will motivate you to get started with at least one the activities. 

1. GOAL SETTING: An aimless life is a sheer path to self-destruction. Anything that you want to achieve in life needs specific goals and ways to measure them. Investing comprises setting short- and long-term goals that match your needs and wants. Goals help you plan wisely and take appropriate action. Long-term goals like retirement require a certain amount of money kept aside every month, growing it at a rate of return and protecting that corpus from inflation. This requires a certain amount of dedication because you have to religiously invest a certain amount every month, without fail. 

Even when it comes to workouts, if you don't have certain goals in mind, then just aimlessly doing random workouts won't grant you satisfying results. The most important thing that one should keep in mind while setting goals is that they should be realistic enough to maintain consistency. Setting goals like earning a million dollars in three years when you have just started your SIP or getting under 10% body fat in a year when you have just decided to start working out won't help you stay consistent. Consistency is the key.

2. CONCENTRATION OVER DIVERSIFICATION: When it comes to designing a portfolio, I have always been biased towards running a concentrated one. The advantage of being aware of every single detail of the company is something that a concentrated portfolio provides. The only thing that needs to be looked after is appropriate hedging. Whenever you decide to run a concentrated portfolio, you scrutinize more than you would if you were running a diversified portfolio because diversification gives you a false hope that under a downfall, you are protected just because you own multiple companies. It is true that if the markets were to fall, a concentrated portfolio would face a higher amount of risk, but the opposite is true under a bull market. Remember, out of $5 billion that Rakesh Jhunjhunwala made, $3.5 billion came from Titan, which is almost 70%. 

When we try to apply this ideology to workouts, constantly switching sports or workouts in order to get satisfying results will delay the process. I believe that following one sport or a workout plan for at least a year should grant you satisfying results. Fewer the exercises, better the results because the more you practice it, the better you become and are more skilled. For example, if you practice squats and deadlifts for a year instead of switching to different exercises, you will lose more bodyfat and build more muscle mass instead of switching exercises. Mastering the form is a prerequisite for mastering the art of deadlifts and squats. Continuing the argument, let's say you are able to squat 20 kg and deadlift 40 kg at the start of the year. If you keep practicing these exercises, the possibility of you lifting at least twice the initial weight increases, reaching a step closer to your goals.

3. PROGRESSIVE OVERLOAD: This is the core principle of resistance training that relies on increasing load to increase neuromuscular demand to facilitate further adaptation. Basically, lift more weights as your involvement increases. In order to meet your desired fitness goals, progressive overload is the key. With the implementation of progressive overload, you tear more muscle in order to build more mass. Whenever you undertake progressive overload, make sure to increase your protein intake in a similar manner, or else the excessive stress will increase the probability of muscular injuries. 

When we look into the field of investments, progressive overload can be applied to your SIPs. After a certain point in the journey, there comes a time when your income grows or your business starts generating more free cash flow. This is the time when investing in progressive overload needs to be implemented. Increasing the contribution made to your monthly SIPs or your annual investment budget is the best way to apply this concept in investing. Increasing the number of books or newspapers you read is also an example of progressive overload in investing. 

4. CORE COMPETENCIES: Why do you think Mr. Modi fights from Varanasi and not from Kerela for his seat? Why do you think the Gandhi family has been undefeated in Rai Barelli? Why do you think Sachin Tendulkar was able to score 100 centuries? The answer to these questions consists of two words. Core Competencies. When we fight or when we practice a skill that falls under our competency, we are indirectly increasing our probability of winning. In terms of investing, instead of following the "hot stock" and investing your life savings in the one popular stock, sticking to your core competencies and finding companies that fall under your circle of competence can give you handsome returns in the long run. Let me share an example. In the Y2K boom, everyone was going crazy about.com companies. Companies like Pet.com were getting listed on the exchanges with valuations worth billions. The only sane mind at the time who had restricted his investments in the IT companies was Mr. Warren Buffett. 

Warren had always stayed away from technology companies because he always felt they were out of his competency and a bubble gum company had a more certain future. Forbes magazine went out and wrote an article saying that he should give up managing Berkshire money. Everything that goes up, comes down. All the.com companies that were trading at upsurd valuations fell like the broken kite. That's when Buffett pored his billions into companies like American Express, reaping dividends worth a million. The lesson here is to maintain your calm when others are losing their and to always stick to your competencies. 

Let's try and apply this same competency logic to workouts. Now, this might sound a bit weird, but I believe that instead of we are choosing a sport, they choose us. There is a very small percentage of people who play the same sport with the same passion and intensity that they used to play when they were 10 years old. Over the years, we evolve and find out that one sport that they can play for the rest of their lives. For me, initially it was cricket. Over these years, mountaineering and triathlon have taken over cricket. The point here is to play a sport that you truly love in order to achieve your fitness goals. If you try and play a sport that you don't like but it burns a lot of calories, your consistency will fall off and lethargy will take over. You don't need motivation to play a sport that you truly love. 

5. MONITORING AND ADJUSTING: Now, the very easiest way to check if what you are doing is helping you or not is to track your progress and study those changes. Strategizing is easy because we haven't considered emotions and time into our calculations. The best way to reach the mountain top is to take small steps. Similarly, monitoring every single change of yours can help you reach that mountaintop sooner. When it comes to investing, quarterly checking financial statements and listening to conference calls of the companies that you have invested in gives you an idea about the possible future of the company. When we want to invest in a company, we have certain expectations and a possible future outlook in our mind. When we read quarterly financial statements and conference calls, we get an idea about what the management is thinking and how capable they are. If your goals and the future that you are predicting are being portrayed in those statements, double down your investments and enjoy the gains. 

Similarly, when we start a new diet or a new workout regime, we have certain goals in our minds. Constantly monitoring small improvements will help us make required changes to our diet. Dieting and designing a workout schedule are a trial-and-error process. No one has a fixed diet plan for people with different body measures. You have to try out different diet plans, figure out what suits your system, and then keep tracking those changes in order to reach those desired goals. Regularly monitoring your weight will also help you learn more about your diet and workout plan. If you are losing weight but you can't see any changes, there is a possibility that you are losing your muscle mass and not fat. Hence, what gets monitored gets improved. 

When I was a kid, my mother used to quote Benjamin Franklin, saying, "Early to bed, early to rise, make a man healthy, wealthy, and wise." It took me a few years, but I finally understood the importance of this statement, aai. Investing and workouts have become my identity now. I am really grateful to have found what I love doing pretty early in life. There are many more similarities between investing and working out, but I think you get the message. Three factors that decide how healthy, wealthy, and wise you become are time, consistency, and patience. If you lack any one of these, you may lose the battle. One more interesting similarity between investing and working out is that every day you get to learn something new. There have seldom been days when I can't recall learning something new. If you are patient enough and if you are willing to invest your time with consistency, you will become what Franklin said, "healthy, wealthy, and wise." Manifest and accomplish. As Mr. Shah Rukh Khan once said, "kisi cheez ko agar dil se chaho toh puri kainaat usse tumse milane ki koshish mein lag jaati hai.". 

Happy Investing.