Financial advice to younger self

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Let's talk about the most important thing first. I am not financially successful. Not even close to the consensus definition/metric. And that's why this is addressed to me. What if, I had to do my youth all over again, this is a list of things I would have loved to know then.

And again, if you're continuing to read it, read it with a bowl of salt.

- Continue optimizing for the lowest recurring cost of living. i.e., living in shared apartments with good enough people and privacy.
- You'll know when it is time to be on your own but now is not the time.
- Get an additional health insurance. No, the one that came with the company isn't enough. And no it's not throwing away money every year if you don't end up claiming it.
- Next, build a corpus of at least 6 months' expense and keep that in your savings account. Try maintaining it.
- For god's sake, start investing. It will seem complex at first but it's not really.
- Next, pick couple of Index Funds with low incurring costs and invest routinely like your life depends on it. Don't put too much effort into finding the best fund because there is little to no correlation between investment effort and investment results.
- There might be a lot of other funds that seem to have done wonders in the past but past performance is no guarantee of future results.
- You might see that investing in Index funds is not exciting at first. And that's the point. Stay away from “all that excites or affrights us,” as Seneca says.
- Have patience (a lot!!) and let compounding do its magic. Always remember: Compound interest is the eighth wonder of the world ^[1]. He who understands it, earns it … he who doesn't … pays it.
- When you finally start investing, you might be very tempted to invest in your favorite company or the next stock that's being discussed on reddit (those will be known as meme stock) but contain your urges.
- You don't know enough about stock picking. You just feel like you know enough.
- Don't invest in cryptocurrency... yet. Because you don't understand it either. It will feel like you're missing the bull-ride and in comparison with other peers you will feel like an old uncle who is apprehensive of new tech.
- You know, sometimes it's just easier to avoid stupidity instead of aiming for excellence. ^[2]
- Manage your money in a way that helps you sleep at night. It is different from saying you should earn the highest returns. Generating and maintaining wealth require different strategies. ^[3]
- Sometimes the market will go down and you have every right to freak out because you are losing your hard-earned money. But consider that as a price to pay to be in the market.
- Explanations of why the market is going down will always be grim and generally negative. But, pessimism just sounds smart and more plausible than optimism because we are human and we have an asymmetric aversion to loss.
- Progress happens too slowly to notice but setbacks happen too quickly to ignore.
- Don't sell just because the market is going down. The first rule of compounding is to never interrupt it unnecessarily.
- Don't time the market either. Time in the market is more important than timing the market. Drop of few points will not make you significantly richer if you're in here for the long term.
- You're in it for the long term, right? i.e., At least 5-10 years?What?! I can't believe you are already planning to Book your profits. Don't sell anything unless you absolutely need the money. I repeat, don't sell anything unless you absolutely need the money.
- Time is the most powerful force in investing.
- Don't think twice about splurging on things that you value. i.e., self development courses, coffee equipments. Even better, don't think of them as splurging but rather—investments.
- Lastly, no one is impressed with your possessions as much as you are.
- Now go save. You don’t need a reason to do that. (And know how much is enough.)