One: You think small is beautiful

Do people just not know how to deal with larger numbers? Or do they believe that small is beautiful?

Nothing happens in a short duration. For instance, you do not become general manager with merely two years of work experience. Similarly, a mango tree takes years to bear the first fruit.

Anyone who asks a question or even gives a recommendation of what is 'good for now' is thinking short-term. This could be from an hour to 10 days to a couple of months. Either way, it's too short a period of time.

The same applies to stock prices and returns.

Are you so happy with 5, 10 or 20% returns, that you are unable to think beyond that? Or is it just tough to imagine the prospect of returns of 80, 100 or 200%?

Do you think that a stock worth Rs 60, which grows to Rs 75 is a realistic gain, but a stock worth Rs 8,000 becoming Rs 10,000 is unrealistic? In terms of percentage return, it is the same!

Maybe we are more comfortable with smaller numbers or simply do not have enough courage and confidence to make it big.

Two: You like debt

When I look at the mutual funds industry, here's a proven maxim: Debt oriented funds manage far more money than equity oriented funds.

This is strangely true for individuals. What is so exciting about an 8 or 9% FMP or some cash, liquid or floating fund? You just cannot build wealth if you think small, and find solace in small numbers.

Another example: You will not find old money ie shares that were built in say 1985, 1990 or even 1995 in over 90% of portfolios.

If you are young or even middle-aged, you need to create wealth. In this phase of life how does a capital-protected product even sound interesting?

There are companies, which give 'stock tips' and thrive on 'daily recommendation'. The disclaimer they forget to put in my view is that 'trading is a zero-sum game'.

As kids we were told that if we aimed for 90% or more in our exams, we might make the cut in the range of 80%. We were taught to dream big right from the beginning.

So, does being more educated or intelligent make us turn backwards,  or at best sideways in matters of financial prudence and practicality? This affinity for small is a very big roadblock in creation of sustainable long-term wealth.

So, what do you really need?