Book Review and Summary: Make Epic Money by Ankur Warikoo

Note: This book summary is based on my personal understanding and viewpoint.

This book is one of the best sellers in financial category in India.

This book is for all ages, however highly impactful for people who are in their early twenties. This book is written in the India perspective, however equally applicable in other countries too.

1. WHY SHOULD I EVEN CARE ABOUT MONEY?

Money is the only trust system created by humans that can bridge any cultural gap. It’s the most universal and most efficient system of mutual trust ever devised. -Yuval Noah Harari, Sapiens: A Brief History of Humankind

Money can buy:

· Peace of mind

· Quality health care, insurance

· Quality food

· Safety

· Options on career, education

· Comfort

· courage

· Happy family

· Experiences

· Freedom

2. NOW, I REALLY WANT TO EARN SOME MONEY!

A salary helps you earn a living. But it also locks you in.

Wealthy people use their time and ideas to create multiple income streams. They work for money, but they also put their money to work.

Professional degrees help you earn a living. Financial literacy helps you build wealth.

Spot the difference between asset and liabilities.

Asset: If it earns you money, it is an asset.

Liability: If it doesn’t earn you money, it is a possession or even a liability.

The biggest asset you have is yourself. Your mind, body, education, well being, exercise, learn matters. Invest in yourself.

The ultimate goal is to move towards a passive income stream — where you don’t have to spend your time to make money.

Instead, your knowledge, your skill, your process, your money make money for you, through your assets.

Earn with your mind. Not your time. — Naval Ravikant

There’s Enough for Everyone. Wealth is a positive sum game. For you to win, no one else has to lose.

3. SO THAT I CAN SPEND IT (WISELY)

It’s Not about Spending Less. It’s about Spending Right.

Budget your expenses.

Break down your income-after-tax:

50% on basic needs.

30% on your wants/desires/things you love.

20% on savings.

Once you receive an increment (or build an additional income stream), flip

the 50:30:20 ratio.

50% of your increment goes to your investments

30% of your increment continues to go to your wants

20% of your increment goes to your needs

‘If you buy things you do not need, soon you will have to sell things you need.’ — — Warren Buffett

Treat your credit card like a cool debit card. Swipe the credit card only when you’ve got the cash ready to go.

4. BUT PEOPLE TELL ME I SHOULD SAVE!

If you don’t build the habit of saving while your salary is small, you’ll never be able to save when you begin to earn more.

List your goals. When do you want to achieve them? Figure out how much each goal will cost you.

And then build the saving mindset.

Save FIRST. Spend later. Don’t just save. Invest.

Where to invest is just as important as how much to save.

Automate your savings.

If you really want to buy something big, wait for 30 days. Chances are you’ll decide you don’t need it.

Rent, if you’re not a frequent user.

Buy bigger sizes. Bigger sizes tend to be cheaper, per unit.

Shop online in incognito mode.

There’s a limit to how much you can save. But remember, there’s no limit to how much you can earn.

Keep finding ways to increase your income.

5. AND USE THE MONEY TO PROTECT ME

First and Always, Protect Yourself.

· Get health insurance to keep you steady amid surprise medical emergencies.

· Get life insurance for when the unimaginable occurs — death, disability, accidents.

· Build an emergency fund for everything else.

‘An emergency fund is like insurance for your peace of mind.’ — Dave Ramsey

6. BUT WHAT I REALLY WANT IS TO GROW MY MONEY

True financial independence comes:

When income from your investments pays for your needs and expenses for life!

When you work because you want to, not because you have to.

When you have money to live well, even without the 9-to-5 grind.

Compound interest is every single reason why we’re told to invest early and to invest consistently. Because, with compound interest, your money earns money on its own. Compounding rests on time.

Understanding Various Asset Classes:

Low Risk : fixed deposit, PF and NPS, physical gold, digital gold

Medium Risk: corporate bonds, real estate, REITs (real estate investment trusts), mutual funds

High Risk: stock market trading, crypto

72 / rate of return of your investment = approximate number of years taken to double your money

‘The problem is that no one wants to get rich slowly.’ — Warren Buffett

7. AND MANAGE MY MONEY WELL

Our money decisions today determine the quality of our lives tomorrow. Money provides us with opportunities.

The older we get, the more money matters.

Based on our age and risk profile, the investment in different categories can differ.

Diversify your portfolio. try gold, real estate/REITs, crypto along with equity, bond, FD.

Your financial path is shaped by your age and your income.

Along with what you want in life and your responsibilities.

You have the cheat sheet, but you’re holding the cards.

Only YOU decide how to play them.

8. I KNOW I’LL MAKE MISTAKES

Everyone starts at zero.

You will make mistakes. In fact, the system wants you to make mistakes. Start, anyway!

Beat the system by learning from the mistakes of others.

Risk can’t be eliminated. It can only be understood and managed.

Low risk will almost always mean low returns.

High risk need not always mean high returns.

Think long term. Take tax into consideration.

Acknowledge the ego. Face it. Then, rise above it.

Stay true to yourself. Stay authentic.

The fastest way to become wealthy is to go slow.

Perfection isn’t the starting line — action is!

You don’t need to have perfect knowledge, perfect data or the perfect income to start your money management journey.

You don’t need to be perfect, either! Start. Because starting imperfectly is way, way better than not starting at all.

9. AS LONG AS I KNOW THIS

Today, I know that we are all prone to biases that we don’t even know we have. There are many biases. Recognize and don’t fall prey to it.

Remember: Your money. Your choices.

Be you, not someone else.

10. OH! ONE LAST THING

Your relationship with money will shape your relationship with life.

Money will not change you. It will reveal you.

The difference between a rich and a wealthy person is how sustainable that wealth is.

Being rich = things people have that we can see.

True wealth = things people have that we can’t see!

A lot of things we think require courage actually just require money.

In a status-driven rat race you can never win.There’ll always be someone who has bigger, shinier and more expensive things than you. Spare yourself this.

Just know that no one’s thinking about you, as much as you are. Just like you, they’re all too busy thinking about themselves!

Money is never more important than your relationships.

Having less doesn’t make you poor. Always wanting more does.

Don’t be too impressed with yourself. You may not be as good as you think you are.

Don’t be too hard on yourself. You’re never as bad as you think you are.

Saving is hard. Being broke is harder.

Learning about investments is hard. Suffering from bad investments is harder.

Paying off debt is hard. Letting your debt compound is harder.

Choose your hard.

Whenever you’re in doubt, bet on the only thing you can bet on. Yourself.

Conclusion:

I am an avid follower of Ankur in YouTube. So, the content of this book is a bit repetitive to me. However, if you have not heard his content in YouTube, definitely this book is good for beginners in investing. The language is simple, easily consumable.

I enjoyed going through the book. Hopefully, you too.