The Smart and Easy Way of Investing

Background

I was talking to a relative who is quite an active stock trader with a long-only approach. He was updating me about where he was going to go and the fact that hiring a cab has become very expensive and using public transport is not always possible. That is when I told him that by using alternative modes of transport or any other consumption item than what we may be used to, we would be able to “create money out of thin air”. When I explained to him the how of it, he decided to implement it immediately and asked me to share this for the benefit of all those who may be interested in such an approach.

That is how this article originated though I always had the idea and I do practice it as well, I was not sure whether I would get some traction with this kind of approach.

How to Own Shares Without Paying Anything?

I have explained the details in the attached video as the post would become too long if I explained it in detail. In a nutshell, what I would do as a consumer is the following

1. Identify all areas of routine life where I am spending.
2. Check whether there are any other alternatives that I can use.
3. Compare the prices.
4. Compare the comfort or satisfaction level and whether any time or other constraints exist.
5. If the alternative is relatively cheaper and does not mean compromising on comfort and satisfaction, opt for the alternative.
6. Work out the price/cost differential.
7. The differential represents the savings made by opting for an alternative way of spending on the need.
8. That saving is what I call “created money out of thin air”.
9. If I had opted for the usual mode, I would have spent say X and now that I am using the Y alternate, X-Y = Z is the money that I have saved or created.
10. Invest the Z element as explained in the video.
11. Keep repeating the above for as many areas of life where there are alternatives.
12. Keep saving and creating money like that and also keep investing in a ruthless manner.
13. On a half-yearly basis, you will be surprised at the number of shares that you end up owning of the company that you choose (process explained in the video).

Here is the link to the video:
https://youtu.be/9XPSkIni_eI

This is what I am already following & there is no rocket science about it. It is a pure numbers game and the power of compounding. Since the amount that you would invest has been created out of thin air (it was already going to be spent but you managed to extract the Z element by acting in an intelligent manner), the timing of buying the shares is not that very significant, however, if you can time it as well by following a technical or a fundamental approach, that is even better.

I would love to read your feedback and experiences if any.