Chapters 4, 8 · The First Principle · Thinking in a Certain Way
This is Article 2 of the “Science of Getting Rich × Mutual Funds” series on rahulmoney.com
In 2020, when the Nifty 50 fell nearly 38% in about six weeks, two groups of SIP investors made very different decisions.
One group panicked. They stopped their SIPs, redeemed whatever was left, and moved to FDs or cash. They told themselves they would “re-enter when things stabilise.”
The other group did nothing — or in some cases, actually increased their SIP amounts. They understood what was happening was temporary. They kept investing.
By December 2020, the market had fully recovered. By 2021, it had hit new all-time highs. The first group missed one of the best wealth-creation opportunities in a decade. The second group accumulated units at some of the lowest prices they would ever see.
The difference was not intelligence. It was not information. It was mindset.
The first principle: thought creates outcome
Wallace Wattles devotes Chapter 4 to what he calls the First Principle — the idea that your thoughts and beliefs are the foundation of your financial outcomes. This is not mysticism. It is behavioural finance.
Your belief that “the market is too risky” leads to avoidance. Your belief that “I will start investing when I have more money” leads to perpetual delay. Your belief that “the rich get richer and the system is rigged” leads to passivity. Every one of these beliefs costs you money — not because markets are rigged, but because your behaviour, shaped by your beliefs, keeps you out of the game.
Thinking in a certain way: goal-backed clarity
Chapter 8 of the book introduces what Wattles calls “thinking in a certain way” — thinking that is clear, purposeful, and backed by a specific vision of what you want.
In investing, this translates directly to goal-based planning. Instead of investing vaguely to “save for the future,” you define: I need Rs. 1.5 crore in 15 years for my child’s undergraduate education. That clarity changes everything — the fund category you choose, the SIP amount you commit to, and most importantly, your ability to stay calm during market volatility.
When you know your goal, a 20% market correction is not a disaster. It is units getting cheaper. Your thinking is anchored to the destination, not the daily noise of the market.
Mindset shift: Stop asking “Is this a good time to invest?” Start asking “Am I on track for my goal?” One question keeps you in reactive mode. The other keeps you focused.
The beliefs that cost investors the most
- “I will start when the market corrects” — Markets spend most of their time at or near all-time highs. Waiting for the perfect entry costs years of compounding.
- “Mutual funds are risky” — Risk is a function of time horizon. A 15-year SIP in a diversified equity fund has historically never given negative returns in India.
- “I don’t know enough to invest” — You don’t need to know how to drive a bus to take a bus. A diversified equity mutual fund is managed by professionals whose full-time job is stock selection.
- “My salary is not enough yet” — Start with whatever you have. The habit and the compounding matter more than the starting amount.
What to do this week
Write your three big financial goals with a rupee amount and a timeline next to each one. This single act of clarity will change how you invest permanently.
Mutual Fund investments are subject to market risks. Please read all scheme related documents carefully before investing. ARN: 351164 | rahulmoney.com