The Sushant Singh starrer ‘MS Dhoni: The Untold Story’ has stormed the box office, raking in more than Rs 100 crore in initial collections. The biopic tracks the journey of Dhoni’s rise from the maidaans of Ranchi to the pinnacle of his career: winning the 2011 World Cup, with that thunderous winning shot becoming his crown jewel.
Dhoni’s journey to greatness requires the usual facets we associate with greatness: having belief in one’s ideas and control over one’s mind, having discipline, being able to work astronomically hard, and above all, having the stamina and patience to overcome challenges and go the distance.
These are great attributes to have in personal finance as well. How, you ask?
Let’s take a look at how you could be Dhoni-like in your approach to saving and investing, which would take you to the financial pinnacle of your own life.
Believe in your dreams, have a plan
How many young people have the foresight of a twenty-something Dhoni? He had the security of employment with the Indian Railways, a much sought-after employer in our country. Yet Dhoni felt it in his bones that he was meant for bigger things. Dhoni’s vision for himself would eventually take him on the arduous but eventually rewarding journey to playing for the Indian cricket team. In investing too, you must have plans, targets, and dreams – building a home, travelling the world, completing your education, setting up a business and so on. Once you know what you want to achieve with your life, you can start taking small steps towards it. Without knowing where you want to go, you may take a winding route to nowhere.
Achieving a target requires hard work and discipline. It’s about putting yourself through the same routine over and over for years, without getting demotivated or quitting. Professional sportspersons like Dhoni also have daily routines. These routines can vary from boring to brutal. Essentially, they’re not for the weak-willed. Dropping out of these routines means losing your edge over your opponents and not being able to achieve your sporting dreams. Investing is similar to this. Working towards a big target like a retirement corpus requires planning, determination and discipline. It requires walking on the same path month after month for years till the target has been achieved. It’s very easy to be discouraged looking at the enormity of some targets. Imagine trying to raise a corpus of Rs 1 crore for your retirement. It seems impossible at first. But breaking the target down in smaller, achievable parts, and then allowing for time and compounding, can help achieve the target. With planning and discipline, any target can be attainable.
One of the things Dhoni is famous for is taking the game to the very end. He has an unfailing ability to absorb pressure. This allows him to not get bogged down and take a game to the final over. And in that tense situation, Dhoni backs his ability to beat his opponents. His ability to go slow at first is essentially about mastering the art of delaying gratification – avoid playing the flashy, risky shots now, remain at the crease, and savour your victory at the end. Long-term investing and wealth creation is about staying in the game for as long as you can. If you have investments, remain invested and let them mature. But if you keep switching out by going for your “release shots” – redeeming your investments before maturity – you will not reap the full value of your money. Time is as important to investing as is the rate of growth. Remaining invested longer allows you to reap compounded growth – growth upon growth. If you invest Rs 50,000 every year in a mutual fund growing 10% annually, you will have a corpus of Rs 7.96 lakh in 10 years. That’s a growth of about 1.6 times on a total investment of Rs 5 lakh. But if you continue with this investment plan for 10 more years, your total investment of Rs. 10 lakh nearly triples to Rs 28.63 lakh. Therefore, remain invested longer. It helps you reach your financial goals quicker.
Control your impulses, bad habits
Dhoni’s ability to absorb pressure sets him apart from cricketers who can’t keep their impulses reigned in. A cricketer may have all the talent and physical prowess in the world. But what good is that without a controlled mind? Sportspersons like Dhoni learn to control their impulses every day of the week. They control what they eat because it would impact their fitness. They control what they say because they don’t want to create a controversy. They control how they perform because a bad show could bring a swift and public end to their careers. Dhoni’s restraint in action and speech is exemplary. Restraint is also what you need in financial matters. Bad spending habits mean you spend beyond what’s necessary, leaving yourself lesser money to save and invest. Over a short period, this would mean tens of thousands of rupees. In the long term, this money could potentially be tens of lakhs. Do take the time to understand your own spending habits. Are you spending more than necessary on something? For example, by eating out instead of cooking at home, you may be potentially spending 10 times than what is necessary on food. Nip these bad habits in the bud, save more, invest more, and grow wealthier quicker.
Keep your cool
When you start investing, you come across the vagaries of the financial markets. Markets rise and fall every day. Millions are made, millions are lost. Fortunes are made just as easily as lives are destroyed on stock markets. When you become an investor, the prevailing macroeconomic conditions and market situations shape your investment plans. It’s important to know what you are getting into and what your risks are. This would help you take calm-headed, informed decisions at any point the markets would start crashing and burning. In knowing your risk profile, understanding your plans, and studying your options, you would emulate Dhoni who has been the personification of those lines from Rudyard Kipling’s poem, If: “If you can meet with Triumph and Disaster. And treat those two impostors just the same.”
Be like Dhoni when investing. You can’t go wrong with his facets.
The author is CEO, BankBazaar.com