What Yoga Teaches You About Money And Investing
- 3m0•
- 23 Feb 2023
Surprisingly, there are many similarities between Yoga and stock investing. There are four basic principles of Yoga:
- Yama & Niyama
- Asana
- Pranayama
- Pratyahara
Each of these teach us something about money. Let’s have a look.
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Yama & Niyama:
Yama (or controls) and Niyama (or positive duties) form the ethical basis of yoga. Yamas include Ahimsa (non-violence), Asteya (non-stealing), and Aparigraha (non-possessiveness), and Niyamas include Santosa (contentment), Tapas (self-discipline) and Svadhyaya (self-reflection).
What it teaches about money: The first step to investment planning is self-reflection. You have to figure out what your needs are and, accordingly, what your investment goals should be. (Related: Calculators that can help you plan your goals)
Once you have decided on your goals and developed an investment plan, you have to show a strong self-discipline to stick to the plan. You’ll have to be content in the short-term if you are working towards a long-term goal.
Of course, non-violence and non-stealing applies to how you make money as much as it applies to other aspects of your life. But one esoteric lesson is also to be non-possessive towards the companies you choose to invest in. Be ready to cut your losses if the company is not performing the way you expected. Equally, when your decision turns out to be right, do not get greedy. Book profit once your target is reached. (Related: How Stop Loss can help you minimize losses)
Success can make you cocky. Do not let your perception overrule research insights that you derive from data. Do not invest in a fundamentally weak company just because your gut says so. Even when you are sure about a stock, diversify and invest in stocks of different types.
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Asana:
These are postures that you can hold for a long time. A firm but relaxed posture takes time to perfect. So, new yoga practitioners start with simple asanas and gradually move to more complex ones with regular practice.
What it teaches about money: As an investor you should start by investing in stocks that you understand. If there is a product that you regularly use, figure out if others around you love that product as well. The company that markets or produces it may be a good place to start. Or if there is an industry that you understand well—say, you are a software engineer and understand the IT business very well—then look at the companies in this industry for investment opportunities.
Once you develop a familiarity with how the stock markets work and how to analyze a stock, it is time to move on to more complex investment decisions. Do you want to automate trading decisions? Do you want to trade in futures? So on and so forth.
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Pranayama:
The yama of prana, or “breath control” is about controlling your breath to ensure a regular rhythm.
What it teaches about money: The markets have a rhythm of their own as well - the cycles of bear and bull. No investor can predict when the markets will rise or fall, but you have to control your reaction to the movements in the market. Do not panic and have a knee-jerk reaction; it can hurt your interests in the long run.
Equally important is to have a regularity to your investment plan. Even if you do not have a large surplus to invest in one go, it is important to invest regularly, even if each investment is as small as Rs. 1,000. As any yoga teacher will tell you, regular practice of even the simplest of breathing exercise is much more effective than doing challenging asanas once in a month or so. (Related: You can now do SIP in stocks with Auto Invest. Know more)
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Pratyahara:
The control of ahara—the external influences—is the hallmark of a yogi. It simply means that your mind can be pulled into a shell—like a turtle pulls in his limbs—to protect it from distractions and noise.
What it teaches about money: As an investor, once you have decided your strategy, you have to trust your analysis and not be affected by rumors or short-term movements. Do not be caught up either with those who keep promoting a stock or with the doomsayers predicting stock crashes. Remember that in the long run, the market usually values companies correctly, and that strong fundamentals allow a company to sail through tough times.
Remember
While yoga will ensure your body and mind are performing at their best, the yoga of investment will ensure that your financial health is as good. Only this can help you beat inflation in the long run.
To improve your financial health, you may want to:
