Equity Investing as a full time career?

[Lynch]

This topic is not probably a useful investment post, or something that might have been discussed already. I though felt it would be good to discuss this on a forum where I would probably find the most amount of people in a similar world and from the same society, dealing with or having probably dealt with similar dilemmas.

As an investor, over time and hopefully with the right discipline and knowledge, we can probably have a reasonable degree of success. I am sure at current levels, most long term investors would be looking at their portfolios with a sense of certain pride, as even though we might be close to highs (who knows!) but on this day things seem good and decisions seem apt.

My query comes more from a psychological perspective, and especially from the background of living in Indian society where equities and investing are greatly misunderstood in my opinion.

Unfortunately the nature of stocks and lack of financial education, makes several people in society around us, be it friends or family whose opinions might matter, probably not credit our work and research credibly. I have often been in a position where people doing far less profitable work, or things like starting businesses but projecting them highly, often get way more respect and adulation than investing in stocks. For some reason, I get the feeling in several conversations that stocks are equated to be close to gambling by a very large percentage of society, and investing gets no where near the respect it deserves.

Socially, a real estate investor can display properties, an art aficionado can display art, a start up founder can display a company website or products, but you rarely see even the most successful investors talking about/displaying portfolios. I know that is a true sign of wealth, and how being rich and wealthy are 2 different things, but living in understatement is not the easiest especially if one feels genuinely successful.

I would hence if possible, ask community members for advice and any nuggets that can be shared to deal with these aspects better, including:-

1. What do you tell people you do, if you largely spend time on investment/research/trading? If you mention something else, does it justify the success you have to peers versus your investments?

2. India is a society characterised by a high level of people showing wealth. Most great investors advise frugality and rightly so. But how does it feel to have done that for long? (Being frugal is not easy if the world sees it)

3. Investors at least for me are a rare commodity to meet, I see this as a quiet world working hard behind the incredible market graph in probably amongst the most intellectually stimulating profession. How do you build a social circle that values that rather than where it is not understood?

4. Any resources or books (say on psychology?) that can help understand how to handle this better?

5. Earnings is probably in a lot of our thought processes and way of being doing what we do. But do we over estimate the importance of profits and earnings in life? Is public image more important or the bottom line? Even the market strangely seems to be valuing Elon Musk higher than Bill Gates ironically!

It has been fantastic to have gained so much knowledge about stocks from this community. This post is a bit unlikely and personal, so would request administrators to delete the same if violating forum norms.

[learning]

I want to achieve financial independence so that i do not spend time on things which i personally do not like. I am okay to study about businesses/ stock market whenever i get any free time and I try to do as much as possible to understand more and more. I won’t say i have done a great job in getting the process, but over last 3-4 years I have started to understand and respect that achieving and maintaining FI is not easy and requires tremendous effort and sacrifice.

If I were to asses maybe I am 10% of what FI means to me materially, assuming it happens in next few years.

Now, whenever that happens (Hopefully soon ) I am pretty content to not get into the status or social game. I personally do not find much joy in job titles ( other than the money it may bring) or latest gadgets etc. Eventually If I feel that i have materially managed to reach a stage of FI, it really does not matter what or how people perceive it. If close one in the family understand what I am upto, it does not matter what broader society thinks of, as its an honest and legitimate way of making a living.

Best of luck for the journey.

[bhaskarjain]

Don’t seek or rely on external validation of your success.

[Lynch]

I know that’s the ideal advice, but in psychology I am not sure if it works that way for everyone. Social acceptance and validation is a major element to human satisfaction.

I think as investors we learn to tell ourselves that it should not matter, as that is fundamentally the right way, I have no doubt about that.

But maybe figuring out ways to build that element of social recognition in our lives might not be the worst idea in terms of feeling happier and more satisfied!

[hcpl2000]

What an amazing post !
So from personal experiences I can understand what you are feeling. Personally for me I had a micro manufacturing business and was relatively higher up in CII at state level so people would not know where I make any money. But as you get into later years of life the financial freedom with no strings attached ( specially of micro or small businesses ) will set you apart and free…good luck and god bless!

[kb_snn]

I have covered some of your points in my earlier post in this thread .

1. I have stated in post No 528 …

2. Forced Frugality cannot work for long . It is value system that you and your family have . What is important to you and your family you should spend only on that …
   If you spend because your friends / neighbours etc are doing it … FI is very difficult as there is no end to it
   Better way to structure expenditure … I will always spend on things I love but only after I ensure that my passive income is 10X of my annual expenditure …

3. You should avoid meeting too many investors … Meet business people and consumers - Understand business & consumer trends … Investing is better if it done in isolation

4. Too many books & blogs … But Better is to introspect and improve self

5. You should not be bothered what people think about you , but why you are doing it , are you passionate about it , and are you good at it is all that matters… in long run

[zygo23554]

Warning: This might sound like a global gyan rant but the intangibles are extremely important. Focusing on how much money one needs to have to turn full time investor is the easier part of this journey

Most people sleepwalk through life in auto pilot mode, they perceive that they lack the agency to make the changes they really want to. This is denial at some level which by definition is unconscious. The power of conscious choice is available to every person, but exercising that choice makes you do a lot of deep thinking for years together. Social conditioning and meeting the expectations of others are readily available to be presented as reasons for not exercising the power of choice.

Most people stick to a sub optimal path because they do not have the mental fortitude to put themselves and their objectives first, not because they cannot see how the current path is sub optimal. Everyone sees it, just that doing something about it is a different ball game.

The first step in my own journey was to see through the convoluted design of the invisible hand that moves the world - social conditioning that prevents people from thinking about their optimal path in the first place, leave alone finding it.

My Eureka moment some years ago was when it hit me that every path has a clear trade off. Running the corporate rat race calls for you to give up A & B, becoming a full time investor calls for you to give up X & Y. The global maxima is never additive and needs to be optimized by each individual. The world fools us into chasing local maxima without giving much consideration to what our own global maxima equation is. Over a period of time, through a lot of introspection and some real world experience, my outlines of my priority became slightly more clear to me.

What I care about are - Control over my time, minimizing reliance on other people, flexibility and the autonomy to be able to focus on the things that I care about. How does money fit into this? Money gives me the flexibility, reduces my reliance on other people and allows me to channelize energy by buying myself time. Money leads to more time, less complexity. More time leads to higher satisfaction level since I am doing the things I care about and am not dancing to someone else’s tune.

This is my “why”, once this was in place all other decisions became easier.

Unless each individual has this “why” sorted out, no amount of reading can help deal with the daily forces that question the choices we make. I know people worth 100 Cr who have no sense of this “why”, I’ve already written enough about this on this thread. Money is meaningless beyond a point, one does not need 20 Cr to feel financially independent in today’s terms. Less than half that amount can do for most people, if the “why” is clear. I know 65 yr old successful corporate honchos who chase external validation even post retirement.

For the “why” to become clear, one needs to have a view on many things like -

What drives me as an individual?
If I were to inherit 100 Cr today, what would I do with my time for the rest of my life?
What prevents me from spending time the way I want to? Commitments/dependents/my own propensity to run the rat race?
What value do the people around me bring to my life? What exactly do I owe them over and above being a good person and performing my duties? Educating your children is a duty, sending them to do their under grad in the US is NOT

In short have a view on every single aspect of your life and whether it is additive or dilutive to your global maxima equation. Once this objective view is in place, downstream steps become pretty clear. You will refuse to get into commitments that force you to deviate from the optimal path and you will have a much easier time communicating it.

There on things like external validation & social status don’t matter all that much since one understands the trade offs well enough to not get overly influenced by anything.

What content to read to help tune in this aspect of life?

Surely not investing books. What helped me the most in this process was understanding how human relationships work. Most of the nonsense we grapple with on a daily basis is due to people (self and others). Read behavioral sciences, evolutionary psychology and how power affects/reflects in every single relationship we have.

Anything more than this on this topic will be an overkill on an investing forum. Any further info exchange can be done through PM’s. This is one subject that I see myself writing extensively about over the next few years, obviously not on this forum.

[vikas_sinha]

Does anybody have a working spouse while they go full-time off a regular job?

The old ball and chain is a prof at an IIX and is a big roadblock on the way of me declaring my atma-nirbhar status. She just got the govt job after her PhD so her struggle has just ended and career started.

It is a social taboo, for a male person to be unemployed, very traditional mind-set, of the entire set of families.

My corpus is 35x my current yearly savings, 20x my current yearly earnings and 45x my current yearly expenditure. My ancestral family wealth is 1.5x my net worth as a backup since I am not allowed to dip into this, the HUF is very conservative, purely invested in govt issued fixed-income schemes and property. I am the sole inheritor. Have no dependent so to speak, parent’s army pension is almost equal to my salary.

They would have me working for a pittance but keep busy 9 to 5.

[Marathondreams]

They are just worried as per the saying “Idle mind is the devils workshop”…

[vij]

My experience is a little different about perceptions. What I have seen is people do have the perception that stock market is akin to gambling - but if someone is doing it fulltime or even part-time as a profession, I have often noticed there is some respect, probably because they assume you are successful in a low-success high-finance-gambling field (admiration?). There is also the assumption that a reasonably successful stock market investor is affluent.

Also I don’t understand why they say, drivers and watchmen give stock tips - this has never happened to me, most of these folks don’t even know what stock market is really about. I think many of us investors and traders, ourselves undermine and underestimate the image of our profession.

[priyankar_13]

if these hot shot MF fund managers can make equity investing a full time career, any retail investor can. all you have to do is buy the index
79% of indian large cap/multi cap mutual funds trail nifty50 over a 5 year period
95% of indian large cap/multi cap mutual funds trail nifty50 over a 3 year period (yes, 95%)
(data as of 19th jan 2021)

Be humble, buy the index and become one of the top 5% fund managers in india

[NNaik]

Anything you do that is not conventional will be difficult to explain to others. You can try but finally it is not your job. Your job is to be fully convinced of your path and give it your all. Entrepreneurship will always have many doubters and people waiting to see you fail. But finally you need to be stubborn enough to pursue your path and meet your goals.

You will find ways of forming your community by attending investor meetups and following the right people in social media etc. obviously one has to be very careful in this. Some mediums like WhatsApp stock tip groups etc. generally are not helpful and distract you

Finally this is an individual pursuit where you need to develop your own conviction. Don’t be naive and be in the know of the market and use people for research but form your own opinions. Obviously you have to be ready to keep learning and improve your process

[abhijain]

Posting a simple survey on the similar topic to get a wider sample of like minded folks.Kindly fill form.
Your 5 seconds will be highly appreciated Also please forward the survey link to like minded folks/groups for wider participation.

Financial planning and future goals

P.S.: admins, please let know if it violates any VP guidelines and take appropriate action likewise.
If it is fine, will publish the survey results

[deevee]

Hi @abhijain

Thanks. I would love to know the results of this. Also can we share this in personal circles to get more responses. I just wanted to get a sense of this. Thanks.

Rgds
Deepak

[abhijain]

sure Deepak…thats the intent…to get wider participation.Please do forward with like minded junta.

[Vijay_Kiran]

Great initiative!
Few of the questions which I think is very important to be included is related to strategies or thought process towards managing expenses monthly once you are not actively earning. Options like 1. Dependent on dividend 2. FD for couple of years of expense 3. Active trading 4. Some other vocation like teaching, training, tution

[asarun]

Good set of questions! Look forward to seeing the results. Thanks!

[zygo23554]

Will soon be hitting the 3 year mark after turning full time investment manager (not just a full time investor).

For most who choose to follow a different path, the energy level tends to sag around the 18 month mark. The first 12 months go by purely on adrenaline and the emotional high a new way of life generates. Around the 18 month mark is when you get used to the new way of life and start looking at things a bit more objectively. You see most entrepreneurs throw in the towel around the 24-36 month mark because they realize that passion is not everything, especially if your opportunity cost is high. Working for a market salary is much easier and much more practical than dealing with uncertainty on a daily basis for a majority of the people. I’ve seen this happen with so many around me that I find it perplexing that people think their problems are unique. People get too ego invested with their views and choices in life to the extent they start taking things personally when things do not work out.

Thankfully for me the journey has not been on these lines, the market run post COVID has helped immensely. If anything I am more certain today about the path I have chosen than I was 3 years ago. Not everything is hunky dory but I am happy with the tradeoffs involved. I’d rather go for a jog in the morning and enjoy a cup of chai than drive for an hour in traffic to fill my day with meaningless reviews and conf calls. Sometimes you need to focus on what you don’t have to do anymore to see the value that a decision brings to the table.

I figure that anything that can enhance the amount of control I have over my time is worth the effort, so long as an economic threshold is met. I can run with my current pace of working for another decade without feeling burnt out as long as health is in place. As is the case with investing, I am starting to prioritize longevity and durability over short term bursts of outsized returns that come with their own costs once the cycle turns

A few external constraints and impositions always push us to work harder and to get better, of course within limits. Without these in place, it is very common for people to just drift along even if they have the money part sorted out. Working on a commercially productive venture has it’s own charms, especially when you do it out of choice. You tend to use parts of your brain that you never got to use as a salaried employee, no matter how senior you were in the organization hierarchy.

At the risk of repetition, it is not wise to become a full time investor unless you understand yourself really well and know what drives you as an individual.

[deevee]

Hi @zygo23554

Beautifully conveyed.

Just to understand what could be the negatives of being a full time investor/running your own investment firm. The pros are very attractive to many DIY investors more so when they are feeling burned out in their professional jobs and feel grass is greener on the other side.

Rgds
Deepak

[ghskrishna]

Thank you for the unbelievably good discussion.

This is a topic I constantly think about. At my stage, it is obvious that I’m several years away before I can think of such a move. Skill, scale, psyche, risks, etc. have been well covered in the thread already. I will just add one decision/criteria for me to take the leap.

10,000 hours of time spent on deliberate, focused investing study/thinking / related activity. I already work in the investment management industry which certainly helps me but I will not count those hours. I also have the bug of obsessing over live price moves given the lockdown, which wouldn’t count either. I’m working on converting this into meaningful time spent per my original criteria. 2 hours on working days, 4 hours on weekends adds up to 936 hours a year. If I’m able to prioritize investing, I’m optimistic about achieving this target in 10 years. And if I can do this, the rest will take care of itself.