Sunday, 1 July 2018

Book review: Investing with Purpose by Mark Aardsma

This book is not just another book teaching you how you should be investing your money in the financial world. Mark's concepts are at a whole new level beyond that, which strongly attracted me to continue flipping the pages. It can be borrowed from the NLB.


It makes a very good sequential read to Rich Dad, Poor Dad. While Rich Dad showed us the importance of financial literacy and getting out of the rat race, Investing with Purpose gives us ideas on how we could actually do it. With stories of his own journey from an early retrenchment 'victim' to becoming a multi-business owner and mentor, Mark emphasized on maximizing the utility of finite resources (time, money, skills, network etc) to materialize investment and entrepreneurial plans. He talked about the tangibles and the intangibles ROI where 'investments' in life are not all about money. The context he wrote in is pretty easy to understand and at the end of each chapter there's a summary under Action Points plus some nice illustrative sketches.

Here are some valuable take-aways that I would like to share from the read. (The word-for-word concepts from the book are highlighted in bold.)




As our time is finite... use this precious resource prudently.

"I observed people who want to start something or do some impactful work turn to education instead of starting. The fear of failure or not being good enough, or the simple fear of committing to go forward, finds a nice relief in the expensive, time-consuming and sometimes unnecessary path of getting education first."

"What you trade to others should be the thing you are best at producing, relative to everything else you could produce. Invest your time where you'll get the best return, and delegate the rest to others."

"Line up your actions with your intended future." - Recognise that every action we do in our daily life and every choice we made are like pebbles that pave the path to what we would want to achieve ultimately in our life. Simply put, we must live purposefully.



Lean into the difficult work as you work towards your goal.

"Investment advantages come from the will or ability to do things others find difficult or impossible. Possessing a high level of skill is one way to get that."

"The choice to leave your status quo and engage in what you love should be based on realistic projections of the future, as best as you can see. Don't leap based on a fantasy, and don't stay put because of fear. Don't waste time in a holding pattern rationalized by what you don't have. Start with what you have."


Allocation of Resources vs Risk vs ROI

"Sort and prioritize your investment opportunities with the highest expected returns at the top."

"Allocate your resources to the highest-ROI investments at the top of your list and say no to other opportunities."

"Bet big on your big advantages." (But make sure you save some resources to live to play another day.)

"Diversify when you need to reduce your risk of a large loss or below-average returns, knowing this will also reduce your chance of a large gain or above-average returns."

When you have a big advantage in an investment, it does not make sense to dilute your returns by investing only a small amount of resources in it. However, if you only have an average advantage and expect only average / below-average returns, you should diversify thereby also limiting your possible losses.

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Next read coming up is The Millionaire Next Door.

PS: Too much clutter on my blog interface, hence I have removed my blog archives from the side bar and compiled into a page that can be accessed from the links on top.

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2 comments:

  1. "I observed people who want to start something or do some impactful work turn to education instead of starting. The fear of failure or not being good enough, or the simple fear of committing to go forward, finds a nice relief in the expensive, time-consuming and sometimes unnecessary path of getting education first."

    Great. That sounds like me. -.-

    ReplyDelete
    Replies
    1. Hi UN,

      That sounds like me too - when I took a marketing diploma thinking that it would help if I start a business, which I never did.

      There are also those who read many books and attended courses on investing yet too afraid to get started and learn from practice.

      First step is always difficult.

      Delete

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