The Circle of Influence: How Friends Shape Your Investment Journey
A Personal Reflection on Two Decades of Learning, Growing, and Building Wealth Together
In the grand tapestry of life’s financial journey, we often attribute our success to knowledge, discipline, or market timing. But looking back at my own path to building a substantial corpus over the past two decades, I’ve come to realize something profound and deeply personal: the single biggest influence on my investment success wasn’t a book, a mentor, or even my own intelligence—it was the friends I chose to surround myself with.
The year was 2001. While most people my age were spending their earnings on the latest gadgets, fashion, or weekend parties, I had the extraordinary fortune of having friends who talked about stock markets and mutual funds. This wasn’t common back then. The Indian investment landscape was vastly different—mutual funds were still gaining traction, online trading was in its infancy, and most people preferred fixed deposits and gold. But my friends? They were different. They were pioneers in their own right, and their influence would go on to shape my entire financial future.
The Power of Your Circle: Why Your Friends Matter More Than You Think
We’ve all heard the saying, “You are the average of the five people you spend the most time with.” Nowhere is this truer than in your financial life. Your friends don’t just influence what movies you watch or where you eat—they fundamentally shape your beliefs about money, risk, and wealth creation.
When your friends are investing in stocks, you naturally become curious about the market. When they discuss portfolio strategies over coffee, you absorb financial wisdom almost by osmosis. When they celebrate their investment gains, you feel motivated to start your own journey. This social learning is incredibly powerful and often more impactful than reading a dozen investment books.
My friends introduced me to concepts that seemed alien at the time: equity investing, systematic investment plans, portfolio diversification, and the magic of compounding. More importantly, they normalized these conversations. Talking about stocks wasn’t showing off—it was as natural as discussing cricket scores or the latest Bollywood release.
The Tale of Two Decisions: My Maruti IPO Story
Let me share a story that still makes me reflect on the nature of patience and long-term investing. Back around 2003, Maruti Udyog Limited (now Maruti Suzuki) came out with its IPO. The issue price, if I remember correctly, was around ₹150 per share. Both my friend and I applied for the IPO, riding the wave of optimism around one of India’s most beloved automobile companies.
We were lucky—we each got an allotment of 150 shares. For someone just starting out in investing, this felt like a significant win. The excitement of owning shares in a company whose cars dominated Indian roads was palpable.
Then came the moment of divergence—a moment that would teach me one of the most valuable lessons in my investment journey. As the stock price climbed, I watched with a mixture of excitement and anxiety. When it doubled to around ₹300, I made the decision to sell. It felt prudent, smart even. I had doubled my money! The profit was real, tangible, and in my bank account.
My friend, however, made a different choice. He held on. While I celebrated my 100% returns, he continued to hold those shares through market ups and downs, through policy changes and economic cycles. Years later, when the stock touched around ₹5,000 per share, I realized the true cost of my impatience. My friend’s 150 shares were now worth approximately ₹7.5 lakhs, compared to my profit of just ₹22,500.
The Mathematics of Patience
My Decision: Sold at ₹300 (2x return) = ₹45,000 total value = ₹22,500 profit
My Friend’s Decision: Held until ₹5,000 (33x return) = ₹7,50,000 total value = ₹7,27,500 profit
The difference? ₹7,05,000 – just from the power of patience and long-term holding.
Lesson #1: The Patience Premium
This experience taught me that in investing, patience isn’t just a virtue—it’s a multiplier. The difference between good returns and life-changing returns often comes down to how long you can hold your conviction. My friend didn’t have superior analytical skills or insider information. He simply had the temperament to hold through volatility and the wisdom to let compounding work its magic.
The Infosys Legend: When 5 Shares Become a Lakh
If the Maruti story taught me about patience, my friend’s Infosys investment taught me about the extraordinary power of bonus shares and long-term wealth creation in quality companies.
My friend had purchased just 5 shares of Infosys in its early days. Not a significant investment by any measure—in fact, it probably seemed almost negligible at the time. But he held onto those shares through multiple bonus issues, stock splits, and decades of the company’s phenomenal growth.
The Bonus Share Snowball Effect
Infosys has been generous with bonus shares over the years, issuing them in ratios like 1:1, 3:1, and more. What started as 5 shares multiplied into hundreds through these bonuses. Combined with the appreciation in the stock price itself, those original 5 shares are now worth several lakhs of rupees.
This is the true magic of equity investing in quality companies: you don’t just benefit from price appreciation, but also from the generosity of companies that share their growth through bonuses and dividends. The initial investment becomes a seed that grows into a mighty tree, bearing fruit year after year.
Watching this transformation in my friend’s portfolio was a revelation. It showed me that you don’t need to make hundreds of trades or time the market perfectly. Sometimes, the best investment strategy is to find great companies and simply refuse to sell.
The Lifestyle Factor: Living Below Your Means
One of the less-discussed but equally important influences my friends had on me was their approach to lifestyle and expenses. In a world where social status is often measured by consumption, my friends chose a different path.
Our weekly entertainment ritual was simple but meaningful: one movie followed by eating out once a week. That was it. No elaborate parties, no expensive alcohol habits, no pressure to keep up with the latest fashion trends or own the newest gadgets.
Luckily for me, my friends didn’t have expensive habits of splurging on alcohol or other vices that drain both financial resources and mental clarity. This wasn’t about being miserly or denying ourselves pleasure—it was about being intentional with our money and prioritizing long-term wealth over short-term indulgence.
This moderate lifestyle had a profound impact on our ability to invest. The money that others spent on weekend binge drinking, we redirected toward mutual fund SIPs. The funds that went into maintaining expensive lifestyles went into our investment accounts instead. Over time, this created a powerful virtuous cycle: more investments led to better returns, which reinforced our commitment to this lifestyle, which freed up even more capital for investing.
Lesson #2: Your Lifestyle Choices Determine Your Investment Capacity
The gap between what you earn and what you spend is where wealth is created. By surrounding myself with friends who valued simple pleasures and long-term wealth over conspicuous consumption, I naturally adopted similar habits. We motivated each other to invest more and spend wisely.
The Golden Rule: Never Invest Borrowed Money
Among all the wisdom my friends shared with me over the years, one principle stands out as perhaps the most important—a rule that has protected me from potential disasters and ensured that my wealth-building journey remained sustainable.
My Friend’s Golden Words
“Never take a loan to invest in the stock market. Never use borrowed money from others to invest. Always use your own earned money to invest—only then will your money actually compound without having to pay back others.”
This advice might seem obvious, but in the heady atmosphere of bull markets, when everyone around you seems to be making easy money, the temptation to leverage your investments can be overwhelming. I’ve seen people take personal loans, borrow from friends and family, or even mortgage their homes to “multiply” their returns in the stock market.
My friend’s wisdom kept me grounded. He explained that investing borrowed money changes the entire psychology of investing:
- Pressure to perform: When you invest your own money, you can afford to be patient. When you’ve borrowed money, every market dip becomes a nightmare, and you’re forced to sell at the worst possible times.
- Interest burden: The money you borrow comes with an interest cost. Your investments need to not just grow, but grow faster than your borrowing cost—a significantly higher bar.
- Compounding works both ways: While your investments compound over time, so does your debt. True wealth is built when your assets compound freely, without the drag of debt payments.
- Sleep-at-night factor: Investing your own money means you can weather market volatility with relative calm. Investing borrowed money means every market correction becomes an existential crisis.
This principle has been my north star through multiple market cycles. During the 2008 financial crisis, while friends who had leveraged their investments faced margin calls and forced selling, I simply held on. During the COVID-19 crash, while others panicked about loan repayments, I was able to actually invest more at lower levels.
Lesson #3: Debt-Free Investing Gives You the Ultimate Advantage—Time
When you invest only your own money, you have the luxury of patience. You can wait out market downturns, hold through volatility, and let compounding work its magic without the pressure of servicing debt. This psychological freedom is worth more than any leveraged returns.
Building a Corpus Through Consistent, Disciplined Investing
Looking back at my journey from 2001 to today, the corpus I’ve built isn’t the result of one brilliant investment decision or perfect market timing. It’s the cumulative result of consistent investing, influenced and encouraged by friends who were on the same journey.
My friends and I would regularly discuss our portfolios, share insights about companies we were researching, debate the merits of different mutual funds, and most importantly, encourage each other to stay invested during market downturns. This community of like-minded investors provided accountability and support that made the journey enjoyable rather than stressful.
We celebrated each other’s wins and learned from each other’s mistakes. When one of us discovered a promising investment opportunity, we shared it. When one of us made an error in judgment, we discussed it openly so everyone could learn. This collaborative approach to wealth-building created a rising tide that lifted all our boats.
The Lessons I Carry Forward
As I reflect on over two decades of investing, the lessons from my friends continue to guide me:
- Quality companionship accelerates wealth creation: Choose friends who inspire and challenge you financially.
- Patience trumps perfection: The best investment strategy is often the simplest—buy quality and hold.
- Live below your means: The money you don’t spend today becomes the wealth you enjoy tomorrow.
- Never invest borrowed money: True compounding happens only when you’re not servicing debt.
- Start early, stay consistent: Time in the market beats timing the market, every single time.
Yes, I sometimes wonder what would have happened if I had held those Maruti shares longer, or if I had been more aggressive in my early investments. But I don’t dwell on these missed opportunities. Instead, I focus on the wealth I have built, the financial security I enjoy, and the wisdom I’ve gained along the way.
A Final Thought
If you’re reading this and wondering how to improve your investment journey, start by evaluating your circle. Are your friends encouraging you to invest, or encouraging you to spend? Are they discussing wealth creation, or conspicuous consumption? Are they holding investments patiently, or chasing the next hot tip?
The friends you keep today will shape the financial future you live tomorrow. Choose wisely, invest consistently, and never underestimate the power of a supportive community in building lasting wealth.
My corpus today stands as a testament not just to market returns or smart decisions, but to the immense value of having friends who walked this path alongside me, sharing wisdom, maintaining discipline, and proving through their own success that patient, debt-free, long-term investing is the surest path to financial freedom.
Here’s to the friends who shape us, the investments that grow with us, and the journey that transforms us.