What is the key ingredient to become successful? Based on my opinion, it is discipline. It is the discipline to consistently make the right choice that separates a successful person from the rest.

The right choice is not hard to make if you are discipline enough to continually learn and update yourself. In fact, all the successful persons are merely doing simple things exceptionally well. That need discipline.

Excellence is doing ordinary things extraordinarily well. – John W. Gardner

The other word for discipline is grit. Grit is more important than IQ. It suggests a growth mindset. Grittiness is therefore a better predictor of success.

How to become successful and rich?

By being a disciplined investor.

Being an employee alone can’t make you rich. But creating a business is hard work and the failure rate is high. Only investing can make you wealthy with modest income. You need to be a disciplined investor.

Investing is easier than any other jobs in the world. It is not physically demanding. What you need is to let your money work for you.

Investing is more important than your job because one day it will outgrow your salary if you do it right.

You need capital to invest. Make it a habit to invest regularly. Starting with $100 a month is very affordable. With grit, you can reach any goal.

The really good things in life are not many, you need to be disciplined to focus on the few things that matter to you the most and avoid distractions. You can afford to take your time to think slowly and thoroughly before making any investment decision.

Risk is inversely proportional to the time you spend thinking and learning on certain thing. The more time you spend learning and understanding about stocks (and business), the less risk it has.

A highly disciplined person is someone who has better control of him/herself. Thus, he/she makes fewer stupid mistakes. He/she is a happy person. If you have better control of your life, you feel happier.

Being a successful investor also means not being a speculator. Be a smart investor by not being a speculator. The shorter the time between your trades, the higher the risk.

Take the slower approach, it will be faster.

Be a smart investor. Being disciplined is a way to be a smart investor.

Stock market is one of the world best inventions. It is a place for business owners and entrepreneurs to get funding to expand their already successful business and to fuel their innovations to make the world a better place. It accelerates the growth of great businesses.

Great businesses create the most value and make the best use of resources. The end result is stock market makes everyone richer.

It is also a place where you, as an investor, can find your best investments. It requires relatively little physical work to generate promising returns. This is what makes stock market an attractive destination for investments.

By investing in stocks, you own a piece of the prospering business. You are a business partner, together with thousands of other shareholders, for the business that is run by savvy entrepreneurs or experienced businessmen.

Usually a business owns valuable assets like properties, brand, intellectual properties, products, lands, etc that are worth a lot money. By being a shareholder, you own a part of these assets. It is similar to indirectly buying and owning lands and properties with the exception that you don’t have to manage them yourself (sweet). It is hard to buy (cheap) land nowadays, but it is relatively easy to buy (undervalued) stocks.

I always dream of starting my own business because all of the world richest men own businesses. As most people know it, running a business is very risky especially for someone who has no prior experience. Most businesses fail. However, with the help of stock market, you can be a business owner or owner of multiple businesses at the same time and also at lower risk. As a stock investor, you can get out of a business easily at the first sight of trouble. You can’t do this when you are the actual owner of the business. Worst case, you only lose what you invest in. You get the benefit of being a business owner without bearing the full risk of running a challenging business. It is sometime cheaper to own the stock than actually running the business yourself.

In fact, the more I understand the difficulty of owning and running a business, the more I appreciate stocks.

Inflation is a monster. It eats away your purchasing power. But not with stocks. Your stock investments are hedged against inflation. Businesses raise prices to cope with inflation. They are always ahead of the inflation. In other words, inflation actually protects your investment.

Plants need time to grow, so as businesses. Businesses take time to make profit. Developers take years to construct buildings before they can generate incomes, manufacturers take time to setup their factory for operation and marketing and selling, etc before they can earn. There is no way around these facts. I am not talking about days, weeks or months of hard work but years or even decades of dedicated and consistent hard work from the entrepreneurs to become successful (Entrepreneurs are grittier than the rest of us). Therefore, it is wise to go long term when investing in stock market.

You can’t produce a baby in one month by getting nine women pregnant. – Warren Buffett

$1 can turn into $2000 by investing in the right business. E.G.: if you bought Public Bank since 1967. This is the power of investing in the right business over long term to generate effortless money. The only thing you need is patience. This also means that you don’t have to be constantly checking the business everyday. Hence, you can have a lot of free time to pursue other life goals that matter to you while investing in stocks. Good businesses will take care of themselves.

Your investment return from stocks is directly related to how much the business is making. It is therefore unrealistic to expect exceptional return from the stock market if the business is losing money. Pick companies that are growing and earning more money year over year is the right way to go. It is relatively easy to pick winning stocks than to start my own winning business.

What is the best time to invest in stock market? The best time to invest is when you have the money. The amount of investment does not need to be big to get started. In fact, it does not matter whether you are poor ($ 100) or extremely rich ($ 100 million), you can still invest in the stock market. It can be the best life time hobby that you can have. A hobby that does not require too much of your attention but is still financially rewarding and fun to do.

The best time to invest is when you have the money. – John Templeton

So, do you have the money to invest in the stock market? Are you ready to make your life and those around you richer? Are you ready to change the world for the better?

PANAMY (3719) or its full name Panasonic Manufacturing Malaysia Bhd is publicly listed in the Malaysian market in 1966. After 50 years, it is still generating cash like clock-work.

I was surprised that 90 % of its equity is coming from profits. In other words, the shareholders only contribute about 10 % of the capital while the rest is coming from retained earnings. It seems to me that the company is generating more cash faster than it could spend.

Cash is king. – Najib

Its return-on-equity, ROE, is 17 % with no practically no debt. Using the rule of 72, PANAMY could double its assets (mainly cash) in under 5 years without the need to increase its liabilities.

ROE and rule of 72

Example: with a return of 17 %, you could double your capital in less than 5 years (72 / 17 = 4.23 years).

This is equivalent to saying that: If you were the owner who had $ 1 million invested, you were entitled to $ 200 thousand of the earnings each year.

The engine of growth is still on

Its 5-year and 10-year earning growth rates (here is how I calculate earning growth rate) are positive, 9 % and 8 % respectively. These numbers are one of the main reasons for stock to double.

Cash-cow PANAMY: Idiot-proof business

PANAMY’s products

PANAMY is an idiot-proof business with well-known brand where you generate more money than you can spend by selling fans, rice cookers, vacuums, etc. In my home at Miri, I found Panasonic products everywhere.

Panasonic products at home

It is an ideal stock for retirement. Another good news is, it pays good dividends too at around 4 %.

Final though

Let see if its stock price doubles in 5 years time.