scorecardresearch4 key investing lessons from Nithin Kamath of Zerodha group

4 key investing lessons from Nithin Kamath of Zerodha group

Updated: 17 Feb 2023, 08:06 AM IST

Nithin Kamath is a name to reckon with in the stock market. Having started investing early, Kamath earned and lost all his earnings in a short time, thus, lending him the necessary experience of surviving the tribulations of this never-ending rollercoaster ride.

Nithin Kamath's investing lessons are for all to learn and imbibe.

Nithin Kamath's investing lessons are for all to learn and imbibe.

Thanks to Zerodha’s meteoric rise in the past few years, Nithin Kamath is now a household name among both traders and investors. Currently the founder & CEO of Zerodha, Kamath made it to the “Self-Made Rich List 2022” with a net worth of 17,500 crores.

Having started early in the stock market lent me experiences that most other investors tend to ignore or miss out on unknowingly. Youngsters new to investing look out for his advice before they put their money in stocks or funds to earn returns.

Making money can be an arduous, complex affair though the same can be made simple by following simple money mantras that include:

Inculcate the habit of investing regularly

Enjoying your money is fine, but ensure that you do not delay investing your earnings. It is necessary to instil in yourself the right investment habit. This however starts with investing early and continuing with your investments for at least a decade or more. Start by investing a small amount of money every month. Then graduate to earning more, saving more and investing a higher amount with time. The stepped-up investing habit helps to mitigate the effect of inflation as it devalues the value of your earnings over the period.

Focus on skilling yourself first

All men are born equal; however, some rise to higher and enviable positions not because they were born different but because they lived differently. Instead of planning how to spend your money or stretching yourself to get your hands on a new electronic device. Instead, spend on learning new skills or upgrading them by learning more knowledge about them. Half-baked knowledge is always dangerous, so it will do a lot of good if you spend your earnings on building mental resilience and skill development.

Do not underestimate index funds

Simple is elegant, yet so many people commit the same mistake of ignoring simple investments like index funds. One may start by investing small amounts regularly in index funds. Doing this can help amass huge earnings in the long run. Considering how index funds track the growth of stocks in a particular market cap or the Sensex, investors continue to benefit from stock prices rise, thus, hinting at a decent growth over the period. 

Apart, ensure that you track daily news and evaluate macro factors before deciding your next move or investment, thus, helping you decide when and where to invest and by how much amount to step up your existing investments.

Do not invest with borrowed money

How many of us fall into the lure of the stock market to invest with borrowed money? Not many realize the blunder they make unless they find themselves trapped in a debt cycle that spirals out of control on continued borrowing. The idea is to invest only in instruments that you understand and park the earnings that you have. Reject the idea of putting borrowed money in the stock market outrightly.

" If you don’t bet, you can’t win"

This line underscores the importance of taking important bets at times. The key learning from Nithin Kamath’s takeaways is “There is no such thing as stopping after reaching a goal”.

New-time investors must know all the options they have before investing.
First Published: 17 Feb 2023, 08:06 AM IST