Bitcoins and Blockchains are the most talked about topics globally. The newspapers are flooded with updates on the Bitcoin rally, anecdotes of how people made millions in this rally, columns on how you can make money in Bitcoins are visible all around.

Bitcoin, the undisputed king of cryptocurrencies took off in the year 2009, priced at $0, however the real adventure began only lately. Bitcoin started with a little less than a 1,000 dollars in January 2017, and touched a little less than 18K dollars in Dec 2017. It has tripled over the last two months alone, from 5.5K in mid October to 17.5K in mid December. This steep rally and the hype has left people wondering “I wish I had a Bitcoin”, it has left us with a feeling of regret, why didn't we invest earlier; of envy, because someone else made money while we didn't; of greed, we wish to make make quick money by investing now; and of hope, we aspire for a repeat telecast of history.

Many of you might be wondering that why didn't your advisor made you invest in a Bitcoin earlier.

You may argue that equity shares similar characteristics, equity prices can witness quick rise and fall and still you invest in Equity. But the answer to this lies in the basic difference between a stock and a Bitcoin. The price of stocks is not merely a matter of market sentiment, but it's backed by the company's fundamentals, it's profits, it's assets, liabilities, it's management, it's future prospects. While, Bitcoins do not have an inherent value, there is no underlying asset which backs the value of a bitcoin. They are traded in the virtual world. When a good stock falls, it is largely due to market volatility or a negative news, it's generally a short term phenomenon, if the stock's fundamentals are strong, you know it's a matter of time before it restores to it's normal course. But in the case of a Bitcoin, “you cannot be Sure”. You may buy today at $15,000, it can go upto $100,000, but it can take a U-turn also, it may fall to 10K, or 5K or 2K, it can even be the next tulip bulb bubble, and can be reduced to where it started from “zero”. We don't know. Nobody knows.

Today, one of the primary reasons for the Bitcoin surge is the investors' FOMO, Fear of Missing out. Fear of missing out the big opportunity to make quick money, the thrill, the extraordinary gains which their peers are making, of being foreign to the hottest word of finance today. The rush of emotions and inclination towards Bitcoin is obvious. That feeling of FOMO indeed is sickening. It's normal that you are troubled for not having invested at the “Right time”.

But do you know, when the world of ace investors are at it, the biggest of all, Warren Buffet has taken a back seat. According to Buffet, “You can't value bitcoin, because it's a not a value producing asset.” It is impossible to value a Bitcoin. You don't know whether it was expensive at $5,000 or cheap at $15,000.

Our word of advice for our investors is,

• Invest only when you understand the product. It's foolish to base your investing decision on mere emotions.
• If you still wish to experience the thrill, set an amount you'd be okay to lose, the amount should be a very small percentage of your assets. Think you are going to a casino. Do not bet your life on it. Do not sell your investments and buy Bitcoins to overcome your FOMO. Great if it was your day, and you anyway had fun even if you lost.
• Distance yourself from short term trading, be it share trading or crypto-trading.

Bitcoin can emerge as the most powerful currencies of all times in the coming years, or it may be a bubble, the biggest of all financial bubbles, and you may not want to be a victim of it's wreckage.

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Whether Demonetization was able to do the needful or it failed in its purpose, is a separate question altogether. Amidst the high profile debates propounded by the Democratic league, we the common man, have our own set of experiences and memories, good and bad, associated with NoteBandi. This chaotic phase has delivered many financial lessons for the common Indian man. So, this article focuses on what did we learn during this one year, and how the lessons can be helpful in managing our finances better.

Don't keep cash at home: The biggest lesson that Demonetization has taught us is 'Do no hoard Cash'. Money lying idle in your cupboards can have serious repercussions like:

• The cash is vulnerable to being stolen.
• The money is gradually diminishing in value. The termite, inflation is slowly nipping it away inch by inch.

Why do you want to handle so much cash after all? If you already had cash in your banks, there was no need to affix yourself to the queue, anterior to the banks on 9th November 2016 and onwards.

And this is applicable to both households as well as businessmen. The latter who deal in cash are also subject to the above side effects.

So, the first step of action is if you still have cash lying at your places, go and deposit the same in your bank account.

Secondly, invest that cash, apart from a little emergency money for your near term cash requirements, so as to shield your money from the inflation attack.

Digitization: Another wind of change that Demonetization has brought in the way we live is the embracement of technology. And the scale at which it has made it's way into our lives is noteworthy. Post the NoteBandi, people were not left with an option but to use digital means for their everyday transactions. Such was the plight that even the sabjiwala's and the small grocery stores, started accepting payments through digital wallets and got their own card machines. Although the cashless phase has passed, yet their machines and wallet codes are in tact and the number of transactions are on the increase.

Demonetization has broken many apprehensions related to Digitization, people who didn't even have a debit card now use wallets and UPI App for buying groceries.

It was witnessed that those who were comfortable with technology a year ago, were better off than those to whom technology was alien. Furthermore, we should start adopting technology:

• For our own good, because of the unmatched convenience and safety it offers.
• And, the government's intentions with respect to its penetration are clear, so the future will be majorly digital, so the sooner we adopt technology, the better it will be.

Tax Planning: Post Demonetization, those who had huge chunks of unreported income, suffered dire consequences. Those who deposited more than Rs 2 Lacs in their accounts had to report this deposit separately in their tax returns. Those who fumbled in filing returns previously found themselves in a hapless situation. There were series of scrutinies and raids conducted in people's homes and offices for not contributing their share to the economy. On the whole, Demonetization clearly conveyed the message, Be honest and file your returns in time.

And why should you evade taxes, when there are multiple methods to legally avoid them. Consult your advisor and invest in a range of products which can help you save a lot of taxes.

So, the above were the lessons which we can learn from the ripples created post Demonetization. Effective implementation of these learnings into our finances can make our lives easier in the long run.

This article is for the ones who fall in the above category. We have listed some tips which can help you in trimming your expenditure, without causing much pain.

Concentrate on Essentials: This is about a girl Nimrat, from Kolkata who moved to Gurgaon for pursuing higher studies in July last year. Four months passed, and winters had set in. Delhi unlike Kolkata, is chilly during winters, so Nimrat asked her dad to transfer her money so that she could buy some warm clothes. Next day she got the money and went to Ambience mall with her roommate to buy winterwear. As soon as she entered, on her right was Zara, on her left was Diesel followed by her favourites, M&S, Bobbi Brown, Mango, Promod, and a number of other brands, all inviting her to splurge. Nimrat couln't resist the bait and soon was rattling in the trap. She spent her money on a ripped jeans, a cocktail gown, and a skimpy top and none of this was going to warm her up during the freezing temperatures. Nimrat wasn't left with a choice but to borrow from her roommate for her “essentials” shopping.

This anecdote intends to convey, prioritize your needs, spend on the necessities, because if you prioritize luxuries, you might end up in in a difficult situation for fulfilling your basic needs later.

Keep your cards at home: A very simple yet effective technique of actualizing shopping within budget is, keep your plastics at home when you go for shopping. Envisage the amount that you'll be needing and keep only that amount in your pocket (keep a margin of 10-20%). So when you go out, you'll concentrate on necessities only as there is no money to pay for impulsive purchases.

Wait for sale: Don't spend Rs 1000 on a t-shirt which you can get for Rs 500, 2 months later. All brands put their stock on sale at least 2-3 times a year with discounts ranging from 30-70%. Nowadays the frequency of sale has increased on e-commerce website, they put a sale almost every month. Don't be an impulsive shopper, commit to yourself that you'll shop only during sale and save a lot of extra bucks. Having said that, it is also important to note that offers, discounts and sale on e-comm websites and malls will try to lure you into buying stuff you don't need, extra 25% on orders above 1,499, 1+1 only for the next 2 hours, buy 2 get 3 and the like. Don't be a victim of such gimmicks, and buy only what you need.

A sane shopping partner: If your shopping mate let's you buy overpriced or unwanted things, then you need to break up with him/her and look for a sane one. Your shopping partner plays a very important role in controlling your urge to splurge and help you save money. So have a shopping partner who is prudent, values money, decisive and is fun to be with.

Shopping is not a stress reliever: When the whole world looks grey, shopping looks pink, and that's why many distressed souls seek joy amidst stacks of goodies confined in the flamboyant glass walls of the shopping mall. It's a general belief that shopping alleviates sadness and you tend to buy things that you do not need, do not want, and most importantly can't afford. This tendency is generally labeled as Retail Therapy. It sounds good as far as it's a marketing ploy, but when it's practiced by us during our lows, it doesn't remain good any longer. Using shopping as a means to relieve our stress time after time, can turn out to be catastrophic for our finances. There are economical ways to lift your spirits, go for a walk, call up a long lost friend, go and have an ice cream, these things will soothe your mood without affecting your pocket.

Sell the stuff you don't need: Most shopaholics' homes are filled with stuff which they have never used or will not use in the future. This is the stuff that you need to get rid off as soon as possible, sell it off and the money you get can help you in sponsoring things or experiences which are of a higher importance. You can save this money, invest it for your future and feel proud of the fact that you made wealth from waste.

The above are a few steps which can aid you in controlling your urge to splurge. This piece does not encourage you to become a miser, rather become frugal, a prudent shopper, because there's no harm in shopping but going overboard is as deadly as gambling your hard earned money in a casino. Saving money won't bring in pain, you need a little presence of mind, a clear vision and some creativity to save yourself from a lot of future pain.

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For those who may choose to not see the lights may be left searching for answers. So let us bathe ourselves on in light of these priceless words said by the masters. To keep things simple, we are only listing the most important ones for our readers.

Investor behaviour has been a subject of deep study with many authors and finance experts reflecting their opinions on it. As is most commonly seen, investor behaviour often deviates from rational and reason. The individual personality traits matter a lot while decision making, often complicating them. The personality is subject to influences, ego and emotions like impatience, fear, greed and hope.

These factors often cloud the facts for decisions which end up being judgmental and biased resulting into wrong decisions. This famous statement by Graham rightly highlights this point.

There is another way at looking at this. As smart investors, we should look to allocated most money to the best ideas or assets that have potential to deliver the highest. At the same time, we should also ensure that our mistakes are not so costly that they harm our wealth noticeably. It is also a pointer to how most of us view and manage our portfolio which are often heavily skewed in favour of fixed income /debt products /physical assets, etc. even though our risk profile may permit a far more balanced asset allocation.

Most of us have a small exposure to equities when we consider our total portfolio but still are most worried about it on a daily basis. Given this mindset, in the context of the quote, we must question ourselves: what are the “costs” and “profits” of what we are doing with our overall portfolio? We should stop worrying about a small portion of our wealth in say equities and instead look at the big picture. Let us focus on diluting those debt products for short term needs and lets give adequate time to equities to give compounded returns in long term. The sooner we reflect upon George's wisdom in our lives, the better will it be for our own wealth creation goal.

Warren had the skill of telling the most important things in the most simple way. This quote and many others similar, shows Warren's belief that that wealth creation was not a forte for the intelligent but for the disciplined. Anyone of us can be wealthy in our lives and it can be done provided we do few important things in our lives and not do the wrong things. This is clearly in reference to how investors approach their wealth /portfolio management wherein we try to time the markets not realising that it is staying invested for long term that really helps create wealth. If we add all the costs of all the wrong decisions, market timings, etc. done in past by us, put together, they would most likely amount to lots of lost wealth.

The important principles of starting early, investing regularly and right asset class ('equities') ought to be highlighted here. These are the right things that we all should aim for. We need not be scientists or finance experts or even literate to follow these principles to be truly wealthy.

Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell.
- Warren Buffet

You won't mind us quoting Warren here again. It is probably one of the greatest mysterious wherein on one hand almost all investors idolise Warren but on the other hand, most of us do not truly follow his wisdom and advice. One of the most often quoted advice /wisdom from Warren is about how we can really create wealth in long term. It is about buying into good businesses and holding them for a very long term without worrying about what happens tomorrow. The above quote clearly reflects how most of us are often worried about short term movements while the true need of the hour is to keep invested for the long term and being passive. Investors have to believe that, if they are investing for long term for say 7-10+ years, short term movements do not really matter. “Stop trying to predict the direction of the stock market, the economy or elections” he says while attributing patience and long term holdings as among the most important factors behind his success.

In brief..
Keeping in mind the spirit of this article, we have only given only four essential quotes though we could have easily added a few more. The idea was to keep the focus on the essential part and not flirt with other less important things. The wisdom from the above quotes focusses on the key essentials – managing investor behaviour, looking at the bigger picture, doing the right things and then having patience to let investments deliver. Out together, these ideas take form as the basic principles, a guiding light on path to becoming rich. And there is really nothing more that we should add to it.

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