Episode 120 / June 6, 2021
Understanding mental models of Wealth Creation with Paras Chopra, Founder, Wingify
“Financial independence is nothing but freedom of thought, freedom of action, and I think that’s invaluable. If you have to constantly work in your life to live, then you’ll have all sorts of restrictions.”
The term “Financial independence” has gained more popularity in Google searches (i.e. Google Trends) post-2020, and we all know why that is.
When Covid-19 got widespread last year & brought chaos and anxiety in our lives, then a lot of people experienced job losses, business-shutdowns, which as a ripple effect lead to non-payment of loans, and monetary crisis. This represents making the wrong decisions with choosing where to spend your money.
During this period, there was another set of people who were able to save more as a result of working from home (i.e their native place) and not having to pay regular expenses like – house rent (of living in a metro city), groceries, commuting costs, etc.
And if you’re wondering, what did most of these people choose to do with their savings?
As per CNBC’s recent article -”15% of current retail stock investors began investing in 2020.”
Probably because as per Paras, “For most people, the way to becoming financially independent, is to hit a jackpot or lottery.”
During the podcast, Paras talks about the money-related choices he made early on in his life. And he doesn’t hesitate to openly talking about the bad choices he made while making his investments and warns our listeners to be cautious of the same. At the same time, he also recommends how one can educate himself/herself in the right way to build a mindset for achieving financial independence.
02:09 – Meaning of “True Wealth” for him
05:15 – “Money creation is obviously not a trivial thing. It requires a non-trivial amount of commitment, intellect, passion, and so on and so forth.”
05:40 – Wingify: 4th attempt of trying to build a startup
06:59 – “If money was a primary motivator, I imagine, I would have gone ahead and we would have raised some funding, but we didn’t.”
10:15 – His definition of financial wealth
13:29 – #1 mistake in investing: Real estate
15:31 – “Chasing safe assets like FD early on is a big mistake.”
18:34 – Having 70-80% asset in equity markets
22:56 – “Diversification is the only free lunch, in finance.”
24:02 – Advice to a 25-year-old on “spending wisely”
26:31 – “If you have to constantly work in your life to live, then you’ll have all sorts of restrictions.”
27:55 – ULIPs: “The more complex something sounds, the riskier it is.”
31:23 – Investing in Index funds
34:37 – His ideal investment: being passive, no speculation, & growing faster than inflation
35:50 – Treasure to read: Warren Buffett’s Annual Letters
37:17 – Focusing on what new to do at Wingify
39:59 – Following Deep work principle
Read the full transcript here:
Siddhartha Ahluwalia 00:00
Hi, this is Siddhartha Ahluwalia. Welcome to the 100x entrepreneur podcast. Today, I have with me Paras Chopra, founder and chairman of Wingify, the company behind the market leading A/B testing tool, Visual Website Optimizer, VMO, as usually called has changed the landscape of customer experience on apps and websites, listed twice in Forbes 30 Under 30 list Paras of his most known for his blog, inverted passion. And for obviously his Twitter handle, where he publishes his known for mental models, thoughts on topics ranging from economics to AI, to blockchain to Life Sciences, welcome Paras to the podcast.
Paras Chopra 00:40
Thank you, Siddhartha. Thanks for having me.
Siddhartha Ahluwalia 00:42
Paras, I want to structure this conversation, you know, mostly on wealth creation. So I follow also, you know, Charlie Munger’s advice, invert always invert, so title if we have to give this conversation, how not to be poor.
Paras Chopra 01:00
That’s a great title.
Siddhartha Ahluwalia 01:02
So, can you take us through your process of wealth creation in the last 10 years?
Paras Chopra 01:08
Sure. So, I think it may help to first define wealth, and what poverty means. I mean, to me, wealth is the stuff you want, you know, the stuff that’s useful in life. So, it’s related but different than money. I mean, money is, you know, numbers in your bank. But true wealth is, I mean, I think true wealth is indistinguishable from a good life. So, in that context, I’ll talk about, you know, the wealth creation. And I think, to a certain extent, when it comes to wealth, I mean, people obviously mean it as financial wealth. And in that regard, I feel talking about financial independence. And what that means is the, is the most important story. So, I’ll take back my own journey from that context. I think it my first brush with making money was when I was 12, or 13 years old. So, I would make a lot of software in Visual Basic, C++ put them online. And these were early internet days, and someone would download my software and one time, I got an email to modify that software, and someone wanted to pay me $100 to modify that software. And just a few changes, I did and the person sent $100, via Western Union, when you had to go to the post office to collect that money. And I was I went with them with the mother and, and got that in a first bundle of money, I think it was 5000 rupees or so. And it felt surreal, felt surreal, because now has 13-year-old tweaking software, writing code and converting that into some real money. That seems really magical. And from there on, you know, somehow, I felt that doing something that I love, which is coding and programming, and trying to make money off it is how sort of I want to imagine my own future. So, I went into startups, as a consequence of this thought, and I read books by Paul Graham and founders, that work book was an absolute gem. It inspired me and opened my mind by reading interviews from PayPal founders, Yahoo founders, Google founders, and seeing them create such a big amount of wealth for themselves. And even for their, you know, communities. by just having a laptop and software, I think that was what was fascinating to me, how can you convert your ideas into so much of money? And so, in my college, I tried doing a number of startups, I just knew that, you know, startups are what I want to do. And, but for me, I think it was more of an intellectual challenge. I think it was an intellectual challenge first, and desire to create money second and intellectual challenge, because this seemed, I mean, Money Creation is obviously not a trivial thing. It requires a non-trivial amount of commitment, and intellect and passion and so on and so forth. So, this was like a mystery for me, how can you create a lot of money without sort of being you know, Birla or Tata or reliance. And within that journey, I kept trying different startups in my college, I did three startups, they didn’t work out, but I was reflecting and learning from my failures. And wingify was my fourth attempt at doing something and I remember when I was doing Wingify, I was because it was my fourth and fifth attempt by this point of time, my default assumption was that whatever I was doing was not going to work out. So that was the default assumption with Wingify as well. But this time, I think I felt a very different kind of response from users. And I clearly remember feeling, you know, in my gut, that I will be able to make equivalent amount of money as my salary. So, I worked for about a year after graduating, and that was my goal. I mean, if you if you talk about a wealth creation journey, that was the first biggest milestone, could I make 50,000 rupees, which was my salary, from, you know, my own project Wingify, as someone else was paying me when I was doing the job. So, when that happened, I was just very, very happy. And it rolled from there. Its various different milestones happened. And I think the joy again, was in learning, what is it to be an entrepreneur, what is to be a leader? What is to be a manager, and money, frankly, had been always a secondary consequence. And the reason I say so is because I mean, if money was the primary motivator, I imagine I would have gone ahead, and we would have raised some funding, but we didn’t, you know, we had more amount of money coming in, then we knew what to do with it. And I think that’s a measure of wealth in, I think, both personal and professional context. I think it’s not the amount of money but it’s the amount of money relative to your needs. And as a bootstrap company, where, you know, we were like five or six people, initially, all very young people or living with their parents having no rent to pay. And literally just having a laptop as an investment and service investment, and charging dollars for our software, as well, as always, this differential that kept on increasing, and that just kept on rolling our revenue, our personal wealth, and the profit of the company.
Siddhartha Ahluwalia 06:49
And during that journey, when you give thought to money and how to manage it, what was the subsequent actions that lead to let’s say, if I’m getting this money from Wingify, as a founder, I’d invest this and these many assets? Right, so my question is the thought process and those actions which you kept on mating
Paras Chopra 07:11
yeah, I think it was two or three parallel threads. The it the first priority was always that, you know, business growth comes first. So always sort of, we made sure I made sure that not taking out money from the company that money can utilize profitably. This is always been the case that, you know, we’ve first taken out and reserved the amount of money revenue that’s coming in for making sure it pumps back into the company, I think, as an entrepreneur, you have to realize that the company that you’re working on is the biggest contributor to your future net worth. Because whatever else you invest in, maybe you invest in equity, you may invest in real estate, you don’t have as much control on the value appreciation of those assets, as you have for your own company. So Wingify is absolutely my number one factor in wealth creation. And that’s why that would always take precedence in terms of its growth of you know, value, and correspondingly factors into value, which is revenue and profit. So that’s number one priority. But after that, I think to a certain extent, as an entrepreneur, I’ve seen some entrepreneurs go to extremes, where they absolutely over invest, maybe they take loans, and they just are crazy about investing into business. I think you can take that to extreme and I’ve seen people who’ve gone into debt, because of their company. So, another, I think another important factor is as an entrepreneur, you can only function effectively, I think if you are feeling safe, and financial independence, financial safety, that net blanket is I think, quite important for an entrepreneur, to feel safe. I think a lot of entrepreneurs could attach their egos with the company. And that’s totally, I think, a wrong thing to do. If something is fundamentally broken, if you’ve not figured out product market fit, if your you know, say customer acquisition channels are unprofitable, just throwing money at it is wasting money. So, you have to be like a thinking like an investor First, if it makes sense to invest in the company invested, if it’s profitable, if it’s not, then you have to take care of your financial independence. So, one factor for me was definitely taking making sure I have enough money to not worry psychologically about my safety, my family’s faith safety, and that is the pool of money. You know, I tried to invest and made lots of mistakes, in terms of assets, in terms of risk. And so, and I’m happy to go into that detail if you’re interested in that.
Siddhartha Ahluwalia 09:54
So yeah, my next question is, right, at what point in Wingify currently when Wingify ARR would be $25 million. Right? What At what point in the journey you felt right now the company has hit a point that I feel financially independent?
Paras Chopra 10:12
Right? I think this comes from, I mean, this has this is possible two different people were in. I mean, the way I think about this is you have I mean, there’s, there’s lots of formulas on the web, but the way I think about it, your corpus should be enough that tomorrow, if you have no income source at all, you are able to live off the interest of your portfolio, I think that’s everyone desires. And the way to calculate that is to see your annual expenses, I think you should, your corpus should be enough that you know, drawing, say two or three or 4% from a corpus, which is the rate that they call as you know, everlasting corpus, if you’re only drawing two to 3%, from a corpus, you can last your entire lifetime from that corpus. So, if your monthly expenses are 100, and you are putting a target of you know, say 3%. So, I think that 3000, as I’m not sure if I’m doing the math, right, but whatever your expenses are, they should be like three to 4% of that corpus. So that’s a target. And once I achieve that target, I felt you know, financially independent, but again, the key point is that, you know, the month annual expenses are the critical ingredient, and everyone can be financially independent and feel financially secure. If their annual expenses are in check. Or if they don’t feel like they need a very big bungalow and a Ferrari, and so on. If that’s a need, I think you’ll never be financially secure.
Siddhartha Ahluwalia 11:48
you’re right, even I have read the same. You know, that if, if you have if you’re spending, let’s say 2.5 rupees in all your expenses in a year, then you need to if, if you have 100 rupees in your assets, then at that point in time, you are financially independent.
Paras Chopra 12:08
Yeah, that’s, that’s exactly what I’m saying.
Siddhartha Ahluwalia 12:10
And then, and then we’ll come to the part where, you know, you’re able to draw good money from the company and how you were able to make mistakes. So, if you can share, what were those mistakes, what are your learnings on investment?
Paras Chopra 12:23
Yeah, I think the number one mistake was real estate investing in that. And I think that comes from our parents’ generations. I mean, they’ve seen such a rapid rise of appreciation in real estate. So, I mean, there are lots of myths associated with it, where it’s safe, it always grows. And it’s, I know what but I do feel, you know, and it wasn’t like a major, sort of, part of, like, my portfolio, but I still regretted not because not because the money sort of like, you know, stuck there, but because there is this aspect of maintenance, with it, you know, if it’s empty, you have to find a tenant. And if not, you know, you have to just keep paying maintenance bills, and so on and so forth. I think I like to see my sort of financial assets work for me, even when I’m sleeping, I think that should be the whole point of having financial assets. But if you have to work for your financial assets, I think it’s the reverse way. So, I don’t like to sort of be in constant. It’s not even worry, it’s just that, you know, you for, for example, if investing in mutual fund, everything is just so transparent, you can see they cut taxes, automatically, everything is sort of done for you. But if your own like an office or a home as an investment, then good amount of your time could go into, you know, maintaining, talking to tenants, finding them doing property bill, so I actually feel it’s a mistake. Also, the data shows that an index fund, like a nifty would beat property. You know, historically also, even if you see right from our parents age, also, you know, if you had invested in stocks versus property, it would beat and even Warren Buffett calls, even says his mistakes is buying the house he lives in, he would rather prefer to rent and I feel the same way. So real estate is absolutely a mistake in my point of view. And I think having I think actually chasing the safe assets early on where I see many of my friends just keep their money in FD’s is a big mistake. It’s a mistake because they don’t believe in the long term sort of proof that equity markets I mean, if you are a 25 year old, you’re absolutely doing a mistake, unless you have a majority of your money in equities, because power of compounding so that by the time you retire the difference between keeping money in FD’s, where the tax rate is higher and interest rate is lower versus equities is a substantial I feel investing that one hour in reading and digesting why equities is a good bet would be the best investment anyone can make in their life. But yet people don’t do it. I don’t know why they keep their money lying idle in banks or FD’s without having a plan. So, the way I structure my thought process around asset allocation is that one, you know, I think health insurance and term insurance is necessary. People sometimes keep their money for health emergencies, which is fine, but it’s the right way to address it is by taking like good insurances for that, once that’s done, the amount of debt, that, by debt I mean, you know, fixed deposits, or even mutual funds for debts, and so on and so forth, or liquid funds, the amount of debt in portfolio should be a function of your annual expenses again, so I see some people do you know, 20%, equity 80% debt, I think that’s the wrong way to think about it. Debts only function is to help you if somehow a crisis happens, and you want very liquid low risk money. And usually having like, you know, one or two years of your monthly expenses should be good enough. But everything else, in my opinion, should be just equities. And that to mostly index funds, I mean, this simple portfolio has served well for me, and no gold or very less, or no real estate, all these things. It just feels, you know, they come from a place where not a deep thought and analysis that’s gone.
Siddhartha Ahluwalia 16:38
Today, I believe you will be like, 34-35.
Paras Chopra 16:42
Yeah, I’ll be turning 34.
Siddhartha Ahluwalia 16:44
Yeah. So, at what age you realize equity is your asset class, because you said right, not a lot of 25-year-old because of what we inherit our thought process from our parents FDs are safe, house is safe.
Paras Chopra 16:59
Yeah, yeah. I think it has been a progressive journey. For me, I empathize with people who don’t do it. But I said not to point out, you know, that. I mean, not to say that they should know better, but to share, you know, what my experience has been? And why and it’s not just even blindly invested in stock funds. I mean, I’ve written threads where I’ve explained why this makes sense. So, I just imagine if someone had explained to me those terms, I would have absolutely jumped and put almost all 100% of 90% of my money into equities. So, it has been sort of a slow journey for me. But I don’t recall, ever there was a point where I was, you know, less than, like 70 or 80%. equities. I still went ahead and you know, did mistakes in real estate, but it’s always been majority equities.
Siddhartha Ahluwalia 17:56
And did you also dabble with new asset class like crypto, or investing in startups in personal capacity? Right, when you had a little amount of that wealth, which you want to dabble with?
Paras Chopra 18:08
Yeah, so crypto is not something I I’m very interested in. I’m interested in from like a cultural phenomenon and the technical details point of view. But I don’t understand it as an investment point of view. emanate to me is a speculative instrument, which is fine if people want to speculate, but I don’t necessarily derive my joy from tracking what’s happening to speculative assets. I mean, to me, you know, life, which is obsessed around, portfolio number is a waste. I mean, portfolio numbers should be in service of leading a good life, but I do see if you have a substantial portion of crypto, meaning my friends group and others, they may or may not have it, but a lot of discussion does around happen around it. And if a substantial portion is invested in crypto that goes up 50 or 60%. On You know, easily some weeks. It’s, it’s not something as a way of like a peaceful, good, tranquil life, so I avoid it completely. I have invested in a few startups and I’ve started investing in it more actively. But again, it’s not been very speculative. I’ve been very, very choosy. And I’m more interested in investing in startups where, you know, I really believe in the technology or the story rather than from a purely financial point of view. It’s sort of a way for me to understand what interesting problems people are solving for.
Siddhartha Ahluwalia 19:42
interesting thing is that, you know, you have been consistent with your practices not that you been hit a jackpot. So, what I have learned, right, interacting with many people is people think right getting financially independent is like hitting a jackpot. Because we have been brought up in an environment where lotteries were there. So, people think of investing as picking, picking up lotteries or investing as fair-weather investing, when cryptos are going up, invest in crypto, when stocks are going up, invest in stocks? what’s your thought on that we really hit jackpot, or is it just a consistent journey? to financial independence?
Paras Chopra 20:28
I mean, it’s been, I think investing should be the most boring thing that you should be doing. If you’re trying to derive joy from investing. I think that is speculation. And we should call it speculation. It’s okay to speculate, but don’t call it investing. And I mean, one invests not for you know, tomorrow, or not for the next year, not even for this decade. I think one invests for, say, your 30-40-50 years there. If, I mean, if you need to sort of tap into that portfolio ever, that is when it’s useful. So, in that sense, whenever you’re investing, looking for what’s hot today, I don’t think that sort of makes sense. If you’re investing for with a timeline of decades, then going with what has worked for decades is a much better bet, than what’s working, you know, yesterday, or what’s working this year. So, I keep, I keep following some very dumb principles like index funds, blindly and consistently. And so far, they’ve served me well. And I don’t, I don’t sort of get engulfed in the hot stock or the crypto or whatever else that’s going on. It’s just not me.
Siddhartha Ahluwalia 21:47
For you, it’s mostly Indian funds or US funds?
Paras Chopra 21:49
It’s both a mix of both. I do think one has two more. I mean, diversification is the only free lunch in finance. And if you’re not diversifying, you’re taking more volatility, more risk than it’s necessary. And having everything tied to India is fine. India is a fast-growing country. So majority is India. But if there is ever a case where there’s India has some sort of hyperinflation or faster inflation or some other issue, I think it would pay to have this diversification in US markets or international markets. And I think there are funds in India that allow you to take US exposure, so you don’t have to, again, even open any bank account, you can just Google, I think US mutual funds or US stock mutual funds, and they are available in India.
Siddhartha Ahluwalia 22:38
And if you have to advise any, like 25-year-old write on savings rate, the savings rate is not really talked about. Right. People again think that investing is that you get a lot of sums of money, and then you pocket anywhere else. What has you been journey, right? Did you focus on savings rate at all? And what percentage rates if anybody’s earning x a month? Right? What person you should say that if one aims to retire at 40? What percentage a month? Should one start parking in equities?
Paras Chopra 23:14
Yeah. Yeah, so I don’t look at it as a percentage, I think one should look at their monthly investment target. And, if possible, and to whatever extent possible, adjust their expenses around it, I think a lot of people do it the reverse way they spend whatever they can and invest whatever that’s left, but I feel it should be the other way around. Because there is no limit to expenses, the world is out there to get your money. And if you allow the world to do it, you know, you can be out of your salary each and every single month. So much better used to I think, use one of these calculators online and see what your monthly investment target should be. If you want to have an X amount of Corpus by year 40, or 50, or whatever, and keep that target for saving. And if you need to shift to a smaller house, maybe get like a not so fancy car or order less online and cook more. I think that’s a good investment that you can make. And frankly, I mean, if ultimately, it’s if we go to the deepest level in terms of happiness, we all know you know, happiness doesn’t necessarily change, it just comes back to the same fixed point. So would you rather be equally happy and have a more amount in your portfolio versus have less amount of money in your portfolio and just get these intermittent kicks by spending a lot more so. So yeah, I mean, absolutely. Spending wisely is the biggest one of the biggest sorts of factors into whether you can retire independent I think it’s also helps once you keep increasing your lifestyle. You keep adjusting there and you will certainly find you know, it’s more difficult to Get back to a lifestyle if ever, you know your income source gets impacted.
Siddhartha Ahluwalia 25:05
Yeah. But then the argument of the people is, you know, why am I increasing my earning, if I can’t change my lifestyle?
Paras Chopra 25:14
I mean, you’re increasing earning to get to a point where you can, you know, say fuck you to things that you don’t want to do. I mean that financial independence is nothing but freedom of thought, freedom of action. And I think that’s invaluable. If you have to constantly work in your life to be able to live, then you’ll have all sorts of restrictions on your life, you know, when to wake up, went to sleep. And I think one should aim for financial independence, everyone should aim for that. Because that comes with so many benefits in terms of freedom of thought, freedom of action. Um, you can always increase your expenses and make your lifestyle better after you’ve done it to a little bit, but I don’t know, I mean, some people might be okay to signing off or not being financially independent, working hard their entire life. It doesn’t sort of I have a hard time sort of understanding that fact.
Siddhartha Ahluwalia 26:15
And, if you can share, what are the other money mistakes besides real estate that you did?
Paras Chopra 26:20
Hmm. I think going, I mean, financial advisors early on have you know, they keep pushing really complex instruments that are hard to understand. I remember early on, there were some things called ulips. There, it was some mixture of insurance and equity. And I have come to sort of a realization, the more complex something sounds, the riskier it is. And, and so I stayed away from those. I’m not sure what you will call as a mistake, maybe buying not buying Bitcoin when it was $2 was a mistake. I mean, I, I recall, I went back in my charts and saw that I knew it was going to sort of grow big, but I never sort of acted upon it. So, I think my inaction, you can call it as a mistake, wherein I was, I was I was averse to certain ideas in terms of in terms of, you know, they being part of financial assets that I didn’t invest. So, I’m not very active in financial investing, I’m pretty sure. Sorry, angel investing, I’m pretty sure if I was more active, I could have made more money. So, and similarly, crypto and so many other things. But I’ve kept things simple. And according to, you know, sort of my needs, I think they’ve worked out,
Siddhartha Ahluwalia 27:48
let’s categorize the mistakes as action, that if you now go back in time, you could change it. Right?
Paras Chopra 27:55
Yeah. I mean, that. I mean, in retrospect, everyone is a billionaire. right?
Siddhartha Ahluwalia 27:59
in action, right? So, I’m talking about action, like buying a house? If you could go back in time, so you would have not bought that house?
Paras Chopra 28:06
No, absolutely. I wouldn’t
Siddhartha Ahluwalia 28:08
So, any other?
Paras Chopra 28:10
I would have not also sort of put money into debt funds. Early on, I think I had a portion of debt funds. I think financial advisors talk about that, it should be 50-50 or some equity debt, I would not have I would have gone 100% equity. Right, from, you know, sort of day one. And I think these two broadly and never went into things like gold or other sorts of instruments. And I think one time I also remember, I had made like, a foolish mistake of just going out and buying five random stocks. I think I, I was just going by mutual funds. And one time I felt you know, everyone talks about stocks, let me buy stocks. And my level of research was that people will always watch movies. So, let’s buy PVR stock. And, you know, people will always have steel. So, let’s buy Tata Steel. I mean, it was really dumb. Half an hour binge of buying a few stocks. I bought it and forgot about it. And I remember after three years, out of five stocks, two had crashed to almost zero, and three had really increased in value. So net, I’d made some 10% return on five absolutely random choices. So, I don’t know whether I’ll call it a mistake or not. But obviously, the level of research I’d put in was close to zero. So, buying stocks, and having that amount of risk without investing time. And I I think in retrospect, that taught me to stay away from individual stocks, so I don’t invest in any stock per se. I go with index funds because I feel it’s hard for me as an individual to beat Mutual Fund Managers who’ve made their careers in 20 years, 25 years and spend all their time researching in the companies. And obviously, it’s hard for me to beat the market, which is the index fund itself. And I think I’ve tried researching into these ml-based trading. So, I read how Renaissance technology, and a couple of other hedge funds use a lot of AI and ml techniques. But again, my conclusion was that unless you’re committed to doing it full time and doing it professionally, almost always you are setting for giving your money to more professional people than you. I think I’ve realized that, you know, either it’s full time that you’re doing or just stay away and be with very safe and passive equity indexes.
Siddhartha Ahluwalia 30:53
So, in your journey, right. What was the point that you realized, right, that index funds compounding 15 to 20% max, year on year is up to the right instrument for you? Because when they do, they’re not something they’re passive, right, as you said, there’s no joy of investing in index funds is still that you are playing x percentage of money every month into the market, same instrument, right? What was your Write, write that if you write it over a long period of time, is going to work?
Paras Chopra 31:29
Yeah. So, I think if you read recent Warren Buffett’s annual letters, he says even he has a hard time beating s&p index, and all. So, I’ve done like reading. And this just doesn’t come from an idle belief. Almost all academic research says that, you know, actively managed funds return even worse than index funds. And even when it comes to VC funds, I think the median VC funds returns worse than index funds. That’s what research has showed. So, I think after it digested why it’s hard to beat the market. It’s not that you know, that if there was like a good logic to why an opportunity is mispriced, then it makes sense. But with more and more. I mean, as time goes on, there’s less and less opportunities that are mispriced where you have an edge over others. So, if we assume that markets are more or less, semi efficient, then I think this makes sense to me, I’m and then and I prefer just having that money thrown into a bin and no forgetting about it, and opening that bin after 30 years and seeing it grow and compound. I’m not the kind of person who wants to really see whether that stock went up. In the next seven days or so it’s, I don’t feel it’s a good investment of my time.
Siddhartha Ahluwalia 33:00
And during your journey, any internal metric that you use to measure that one you want mentioned one during a podcast, and if it makes you unpeaceful, stay away from it, right. And that thing you followed with Bitcoin, so you’re not worried whether it’s going up 50% or down 50%, or any other internal metric, while you focus while managing money.
Paras Chopra 33:30
It has to it doesn’t, it shouldn’t require me to work. That’s again, like real estate is off the list because it requires me to work. So, I wanted as passive as possible requiring as less work for me. And second, like you said, you know, I, I don’t like to speculate, unless, or until I have some special knowledge or an insight, or an edge, otherwise, you’re just idle speculation. And I don’t see how that can work in my favor except for luck. So, I don’t want to rely on anything working out for me being lucky in something, I want the logic of an investment to make sense. And, and I don’t have like an IRR target per se. I think that’s something beyond anyone’s handle. It really depends on a large level, how economies are growing, how innovation is happening, and so on and so forth. But as long as I think my portfolio is growing faster than inflation, you can call that as the base level metric that I’m tracking whether my money is growing faster than inflation, because if it’s not, then it’s truly declining in purchasing power.
Siddhartha Ahluwalia 34:47
can you recommend any resources books that you read or you follow currently the blogs on managing money and managing and building wealth?
Paras Chopra 34:57
I have not read it but people tell me this book. Psychology of money is a good book. And I’m a fan of thought process by Warren Buffett and Charlie Munger. I think Charlie Munger Almanac is a good book to follow and Warren Buffett’s annual letters and absolutely, treasure to read. And I would advise your readers to go and simply google index funds versus active mutual funds and read some articles around it, why it is so hard to beat? You know, these passive index funds, and I think the financial independence subreddit on Reddit is also a good resource. They do talk about a lot of things that would be relevant to young people who are starting their investment journey.
Siddhartha Ahluwalia 35:47
And now, you when you’re financially independent, what’s your daily routine that you follow? You’re also like the chairman of Wingify earlier, you were active CEO, and you took a step back and did that. What was the reason for that not what’s the routine you follow in your day?
Paras Chopra 36:06
So, reason for that was, I think both Sparsh and I want to play by strengths. And I realized over a period of time, my strengths are in figuring out and building something new. So that zero to one phase is something I really enjoy. And be I think I’m good at that. Having done that a couple of times, within Wingify with different products. And, and that’s the whole point. And that’s what I focus on right now. So, I’m constantly focused on the innovation part. And there Wingify could enter into, say, new businesses, or what new products can Wingify create, so I really enjoy seeing that, you know, blank slate, and thinking, What Wingify could sort of fill in that blank slate, and that’s how my days go, where I’m reading and researching and thinking, partly from a curiosity point of view, but partly from an action point of view also. And that’s mostly about it. So, focusing on what knew to do, and reading and researching, so you can really think of sort of like, an internal entrepreneurial, rested inside Wingify, which I really am
Siddhartha Ahluwalia 37:27
and you moved away from Delhi to Pune.What was the reason behind that?
Paras Chopra 37:33
I mean, I’d grown up in Delhi, all my life was spent in Delhi. And I felt, I think it’s, it’s, it was the right time to sort of explore living by myself living me and my wife to live by myself. And also, Pune, you know, was so wonderful city when we visited, great weather, less polluted, and more chilled out. So purely from a point of view of exploring something new is decided, you know, moving away from Delhi, and spending time outside of Delhi would be a good idea.
Siddhartha Ahluwalia 38:12
one thing, which is evident across all your writings, and now you’re publishing a book, right, which is mental model for entrepreneurs, right. And you share a chapter on that. So, it looks at most of your days are spent in curiosity, from your passion, Is there like a separate reading time that you have like two, three hours a day with you, folks?
Paras Chopra 38:40
in the morning, so the way my sort of me, I mean, I don’t take meetings before 4pm, or 5pm. So, I, I think I do follow what you can call us deep work principle where you have a block of time slaughtered just for yourself. So, in the morning, when I’m most energetic, I feel most productive. I slot that time to read, think and write. So, from, say 10, or 11am to three or 4pm is my own time. And after that, if the meeting discussions or email or Slack, that’s when I go about and check it. So, the best time, the best sort of slot of my day is kept to exploring my curiosity.
Siddhartha Ahluwalia 39:26
And is there a time that you were at like 7pm or 8pm, that you put a hard stop, you will not take any meetings?
Paras Chopra 39:34
Here usually I don’t take meetings after, like 7pm or so or on weekends. I think I kind of like that way. Where in and I’ve seen that. I mean, I think one of the one of the biggest productivity boosters that Google calendars can do is to reduce their default meeting time by one hour to 30 minutes. And my default meeting time is 20 minutes. And I failed, whatever can be discussed in one hour can be discussed in 20 minutes. So, I don’t think being productive, frankly, is a function of doing so many meetings, answering emails all day, or doing an hour-long meeting, I think it’s a matter of giving deep thought to what you’re doing. And, and these days, I think insight and innovation is more important than just pure hard work. I think there’s enough capital available in the world, but what’s not so abundantly available is this aspect of how do we innovate and create a better world? How do we put capital to a better use? And that can only come from good ideas and good ideas are a function of attention. And you can’t be attentive if you’re just busy, your entire week, the entire day.
Siddhartha Ahluwalia 40:51
for you there, meaning no phone calls on your work days before? 4pm? no slack? Nothing?
Paras Chopra 41:01
In fact, I mean, the phone calls are also I mean, disabled. I have done this iPhone as a great feature of silent unknown caller. So, I, I, I don’t even pick calls if they’re coming from unknown people. So, I think until three or 4pm, it’s just me and reading on my laptop or writing an essay, or composing a Twitter thread and really thinking deeply, or maybe even writing a document on an aspect of Wingify. it’s just me, I don’t like Slack, WhatsApp phone before four or 5pm.
Siddhartha Ahluwalia 41:33
And if I can ask, when is the book coming out? I love all the chapters which you have posted.
Paras Chopra 41:40
So, it’s actually written I mean, I had written all the chapters, but I’m releasing it one by one after reviewing it making better looking diagrams. So, I’m keeping up I mean, it’s also I mean, I, I believe that if you are enjoying something, you do it as slow as possible. So, I’m sort of intentionally delaying it, because I’m enjoying this whole process. So much. So, one post per week means I think it should probably be done by this year sometime.
Siddhartha Ahluwalia 42:07
And you have a physical book deal in place right now for it.
Paras Chopra 42:10
No, I, I feel putting it online. I was reading I think a median book is sold 10 or 20 copies. So, I think physical book is more to stroke the ego. That is the one I wanted that. But I think the chapters of the book have been read by more people already than what my book would have been, you know, likely to have sold a number of copies. So, I’m happy to just put it all online and people could read there forever for free.
Siddhartha Ahluwalia 42:44
And I especially loved the diagrams in the book. I think that’s done by your wife.
Paras Chopra 42:50
Yeah, the initial ones were they really beautifully done. And then she got sick of me requesting all the time to draw. And then I went to degrade the quality and now I create them myself, but the initial ones are by her and they they’re gorgeous.
Siddhartha Ahluwalia 43:09
Thank you, Paras, it’s would be a wonderful conversation, exploring your mind on money and wealth
Paras Chopra 43:15
Thanks Siddhartha, really enjoyed talking to you.