“The only thing that is worse than being blind is having sight but no vision.”

Helen Keller 

Some time ago, a buddy of mine sent me this video. It’s a scene from this not-so-famous sports flick called “Facing the Giant”. Here it goes:

As a finance guy there is a very important lesson in this video for me and others like me. You see, in my job I have met and intimately known the finances of people from all walks of life. From the richest rich top 0.1% to the averagely rich. The one thing that everyone has had in common is their approach to estimating their long-term wealth. When it comes to putting a number on it, they consistently sell themselves short. They underestimate their potential by a lot. I try two tools to help expand their imagination on what the possibilities be.

One. Google the term “NAV of Nippon India Growth Fund.” One of the pages would get you to a page like this. At the time of going to press (12 Sep 24), the NAV of the scheme was a staggering Rs 4170.47. All funds when they launch have an NAV of Rs 10. This has multiplied client wealth by a stupendous 417X over the last 29 years. It may achieve a cool 1000X over the next 4-5 years. (This should not be construed as investment advice.)

Lets put this into perspective. An investment of Rs 1 lac at the fund’s inception would today have grown to Rs 4.17 cr. It would today be a staggering sum. It’s a story for another post altogether that not many investors were able to personally see this kind of growth. I have tried asking a lot of people to guess what the amount would be today. The closest guess was off by a mile. That was precisely the point I am trying to make in this post. That we overestimate what money can do in one year and underestimate what it can do in three decades.

When it comes to your finances, you don’t need an advisor. Just like in that video, you need a coach. A coach who shuts off all distractions. This includes putting a blindfold in front of your eyes (akin to not letting you track short term investment performance). The coach pushes you to do a death crawl through the hard yards with the monkey on your back. Because when then you reach your goals, the feeling is oh so sweet.

Two, Mr Bugs Bhargava from the indomitable short movie: One Idiot

The best favour that an investor can do to themselves is watch this short movie. It was produced by IDFC Mutual Fund (now Bandhan MF). It was directed by mainstream bollywood director, Amol Gupte.

This film is going to be the reason for creating thousands of first-generation multi-millionaires in India. In its own innocent and entertaining way, it drives home the point of living frugal yet achieving big. I don’t want to give any more spoilers. If you haven’t watched this movie, then its a must watch. It’s especially good for young kids in your family too.

More often than not with these two tools its easy to expand your mind to the limitless possibilities of compounding. And as Ralph Waldo Emerson, rightly put:

“The mind, once stretched by a new idea, never returns to its original dimensions.”

And now for the answer to the quiz. Drumrolls. Its a meager 23.17%. Which is how compounding works. Where the rate of returns is not glamorous but the time the investment was held for is.