Running & Investing : Inertia 

Inertia (noun): A tendency to do nothing or remain unchanged.

Every runner experiences state of inertia, which could be due to injuries, illnesses, weight gain, lack of enthusiasm, performance plateaus, lack of improvement & boredom. This is the time to regroup & refocus your thoughts and take corrective measures.

This is the time to regroup & refocus your thoughts and take corrective measures.

Sir Isaac Newton would have never imagined that his law of inertia would be applied to human behaviour & motivation. But the fact of the matter is this: We all do what’s in our comfort zone i.e. our habits and we are highly inclined to continue with routine which we have established for ourselves.

Investor inertia, can be defined as a common condition where investors are comfortable doing nothing. Having met diverse individuals, I have observed that people fear most of the picture that will come out once they start to plan their personal finances. Faced with too many choices, we do not know what to do and end up postponing …….

Denial is the common behavioural trait . Why ?

When it comes to dealing with personal finances, many of us , make it a habit of delay in putting the money to work. This

This self imposed inertia can be due to several possible reasons – not on priority list, haven’t set goals, don’t know where to invest, fear of unknown, dependence on ancestral assets amongst others.

There is an explanation for this investor inertia. Many of us have pending to-do list, which we all are aware of and firmly hope that some weekend we will sort it out. And the weekend(s) come and go…come and go…..

The list varies …… from updating nomination details in DMAT account…….. to checking bank statement & not to mention the WILL, we never made.

Legendary queen of soul singer Aretha Franklin passed away in August 2018 after battling with pancreatic cancer without leaving a will or trust for her estate, valued at about $ 80mn. Surprising considering the fact that she has a special needs son, who needs financial and other forms of support for his entire life.

The perils of inaction are well known. One needs to take cognizance of the fact that to create wealth one needs to sacrifice its present use for future gains.

What can we do and get out of this inertia ?

# Start with setting our house in order, our past financial negligence -> such as,not adding nominee in that DMAT

not adding nominee in that DMAT

  • or bank account,

closing e

  • xtra bank accounts,
    • checking your present liability cover ,and

    Keeping your signatures same across all investments

  • checking your present liability cover ,and

Keeping your signatures same across all investments

  • ….to begin with …

# List your goals and create buckets; follow the process to T

# Don’t invest small amounts to test products

# Create a Will, once you are not there your Will ensures that your wealth is distributed the way you had planned

Sooner you are able to get rid of investment inertia faster you will attain financial freedom.

Content : Ajit Kaushal