A hidden tax advantage of mutual fund.

Hello ladies and gentlemen, this post is about wealth.

A friend of mine was asking for my advice on investing, he wanted to start investing directly in to share market. As I was a sub broker in stock market before, I knew the futility of trying to teach stock investing to people who are past 35 yrs age. But he was a good friend of mine.

So instead of teaching him I just adviced to go with a mutual fund. He asked for the advantages of mutual fund over direct investing through demat account.

It was the first time I was asked this question. I just used mutual fund to invest only a part of my investment for diversification. So I started thinking. And it clicked that there is a hidden tax advantage, particularly with the growth option of the mutual fund scheme.

Generally we only notice the things which we can see or experience, but don't notice those which doesn't happen. In psychological terms, it is called availability bias. (We only see or consider what is available in front of us.) For example surviver of a fatal accident like a building collapse might tell that he only recited god's name and hence he survived. And we just remember this that reciting god's name will save us. But we don't think about what the dead people did before death in the same accident? There is no way to know but certainly, of they believed in God then there is a high probability of them reciting the god's name. But still they died.

In the same way we can't easily notice the hidden tax advantage of mutual fund.

When we invest directly in the stock market, we generally creat a portfolio of stocks. When we think a particular stock say x has appreciated in price too much than the fundamental valuation of the company or the growth potential of the company. (In simple terms you regularly use a particular brand of pen that you purchase for 10 bucks, and you know the pen is worth only 10 bucks and one day a stranger comes and he notices the pen, likes it way more and offers 100 bucks for it. Obviously you will sell it and go to your regular shop and purchase a new one for 10 bucks.) Though it sounds crazy but it regularly happens in the market, or the opposite also happens in the market, like, a person have bought the same pen but doesn't liked it, so now he is trying to get rid of it for 5 bucks.(shares are not always perfectly priced in the stock market or in other words, share market has inefficiencies at most of the times.)

So you will do the same thing in stock market, that is sell the overpriced company share and purchase an underpriced company share.

But when you sell the overpriced share you will book the profit and for this profit you have to pay the capital gains tax.

Mutual funds also construct a portfolio of investments, sells the overpriced investments and buys the underpriced investments. But a mutual fund doesn't pay tax on the profit booked. It's unit holder has to pay tax when he gets profit from the mutual fund, that is when he gets the dividend on the mutual fund units he holds (dividend option) or when he sells the mutual fund.

If one has purchased the growth option of mutual fund then he only books the profit when he sells the mutual fund units. So for the holder of growth option mutual fund units, he can defer booking profit and thereby the capital gains tax as long as he wants.

That is, if you invest directly (purchase individual shares), then each year your investments are reduced by the tax you pay while in the growth option mutual fund units you get to use this capital gains tax money until you book profits. Even if this gain is only 1% of the investments per year in 40 years it will creat a compounding gain of 48.8%.

So if your stock picking skills are not better than a professional fund manager and don't have the resources (time for research, strong will and capacity to learn) then investing in the growth option of a good mutual fund for long term is a good profitable option for you.

Thank you and have a nice day.

Sumit,

The POWER is when,
You use ODDS,
To get EVEN.

Setting your frame of reference right - Part-2

A few days ago a post appeared in my facebook feed in which a friend of mine was asking for investment advice. I was thinking, is he gone mad? How can a sane person can ask for investment advice to whoever sees his Facebook posts? This incidence inspired me to write this second part of my blog post.

In the first part of Setting your frame of reference right, we discussed about how to treat our expenses in a proper perspective.(just like a map.) Now in this part we will discuss about how to look at our investments in proper perspective.

In the last part we saw how a wrong frame of reference can land us into trouble, just like a faulty map (remember those instances when we are finding a place by using Google maps, and because of bad reception our location is shown at wrong point leading us to a wrong way.). We also learnt, how can we compare our expenses to our earnings, here also we are going to do the same thing, that is compare our earnings with our investments.

A simple reference point we can set is how much I earn in a particular time? That is if I am earning Rs. 1000 per 10 hour work day then I am earning Rs. 100 per hour. Then I can think like if I am investing Rs.1000 in one investment which will give me Rs.100 back every year for the rest of my life, then I will have to work 1 hour less every year.

Suppose after cutting for holidays, leaves, vacations etc., you work around 250 days a year, then you must be earning Rs.250,000 per year. Also imagine that you are saving 50% of this income, that is you are saving and investing Rs.125,000 which will give you Rs. 12,500 every year which is twelve and a half days of work.

If you reinvest this passive income from investment and 50% of your job income for 12 years at 10% return on investment, then your passive income for the 13 th year will be Rs.267,000, that is your passive income will exceed your salary. At the same time your investment amount will be Rs.2,673,000. What do you say about it?

Early retirement huh?? ;-) or

FIRE- Financial Independance Retire Early??

I know this calculation is pretty simple, I have not included the inflation rate in this calculation but your job income is also going to increase along with the inflation.

The whole point of this blog post is to provide a proper frame of reference. I am not providing any investment advice. You have to decide it for yourself, no-one else can know your financial condition better than you. And now a days there are pretty easy and cheap investment solutions out there. Making investments has never been so easy. You can make investments by just touching your smart phone screen a couple of times. If your head spins with a thought of how to research stock market, commodities like gold, silver, copper, crude oil, bonds, IPOs, debentures etc., there are mutual funds which can do just that for you, then there are low cost index fund etc.

You just have to stop making excuses, take the responsibility of your finances, think for yourself and start moving.

That's it for today folks.

Have a nice day...

Sumit,

The POWER is when,
You use ODDS,
To get EVEN.

COVID-19 resolution

Coronavirus disease 2019 (COVID-19) is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2).

-Wikipedia

The world is fighting to contain the spread of COVID-19. To stop the infection from spreading person to person countries have enforced lockdown of population, which is a curfew like condition, everyone is locked in their home, preventing person to person contact and hence arresting the spread of Novel Corona Virus.

I am also confined to my home. But this situation is giving ample time to reflect. So I thought about making a resolution just like the new year resolution. But this time it gave me a lot of time to reflect.

Ladies and gentlemen this time I am thinking about wealth.

I am thinking about this stock market crash. Most global markets have crashed around 30%. What should I do?

To get the answer of what should I do now, I have to compare it with last great stock market crash I have experienced. That was the 2008 market crash, the subprime crisis. I have seen how the market crashed, how it recovered, what I felt at that time, what I did at that time, what was the result of what I did.

It was hell of a roller coaster ride of emotions. First because of the lower circuits, and the commentary on business channels, I was mortified, I was feeling like there is no end to this fall, but my rational mind was telling that market won't go to zero. Some businesses will use this condition to their advantage. Or the business environment will come to normalcy. So I should buy the blue chip companies which were quoting at very low PE multiples (price to earning ratio). There was a battle going on in my head, my rational brain fighting against my feelings. And of course the feelings had the upper hand.

So what I did was, market was falling, so tried to hedge my position by buying the put options of the index, I made a decent profit in it. Actually this profit gave strength to my rational mind. So I bought some good quality stocks quoting at throwaway valuations. But I bought only little.

After only 3-4 months in to recession, the market started going up quickly, my purchases quickly went up 2-3 times, I was very happy. I booked the profit, thinking the companies are now quoting at expensive valuations. Moved the money in other companies.

But then if I see those companies now, even when down more than 30% from their top, they are still 5-10 times more than my purchase price of 2008-9, some are even shelling out dividends more than my then purchase price every year. Almost every company which I purchased then has eps (earning per share) more than my purchase price in 2008-9. So the bottom line is, I have lost a lot of profit. I wish I had just sat idle with my investments.

Warren Buffett has always advised to purchase only those shares of great companies at great price so that you don't have to worry if the stock market never opens again.

This advice and my experience till now combined are having a great impact on me in current situation.

So the COVID-19 resolution is buy only those businesses which you don't need to sell for atleast 3 years, no profit booking. Sell only if there is some permanent change in the profit making capacity of a business. Otherwise let the profit rise, don't worry if the valuations go expensive.

I don't really know how this will play out.

But I would definitely try.

What is your COVID-19 resolution?

Are you reflecting on your past mistakes?

Do write your thoughts..

Have a nice day..

Sumit,

The POWER is when,
You use ODDS,
To get EVEN.

How should I react to Coronavirus disease 2019 (COVID-19) in samanyabuddhi way???

Coronavirus disease 2019 (COVID-19) is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2).

-Wikipedia

As I am writing this blog post, more than 6,63,000 people have been confirmed infected world wide, it of which, more than 1,42,000 are now totally recovered and there has been more than 30,000 deaths. We can say that this disease (COVID-19) has become a pandemic. In many countries it has reached stage 3. The stages of the spread of disease are-

Stage 1- Where the authorities know who came from the affected countries and those persons should be quarantined and kept under watch for signs of disease.

Stage 2- Where the people migrating from affected countries come in contact with local people, like family members, friends, relatives or various service people but still the authorities can track those who came in contact with the migrants from affected countries.

Stage 3- Now the local people who came in contact with the migrants from affected countries mingling with other local people. Here because of the large scale of interactions the authorities cannot track the spread of infection and hence everyone is a suspect of infection.

Now let's have some thought about the virus.

What is a virus?

Virus is not actually a living thing. It is just like a computer virus. It only works when conditions are favorable.

A virus on it's own don't shows any signs of life, it doesn't consume food, doesn't make any energy, there is no chemical reaction happening inside, there is no movement, no breathing, nothing.

A virus generally is just an RNA (Ribo Nucleic Acid) which contains the generic codes for reproduction, some enzymes which helps in starting the reproduction process, these two are packed in a protein and lipid envelop. This protein envelop has some special proteins which acts as key to enter the host cell.

If there is a pen drive, which contains a computer virus capable of infecting windows 10 through some weak points of windows 10, and we keep the pen drive in a closet, then nothing will happen until we plug the pen drive in a powered on PC with Windows 10 operating system. If the virus I is plugged to a Windows 10 pc which is powered on then only the virus will get activated and start infecting the PC, then if there is an antivirus installed which recognises the activity of the virus then there are 2 cases 1) the virus may have capacity to overpower the antivirus program, in this case the virus will cause harm, make copies of itself in all connected devises or 2) the antivirus successfully deletes the virus files and there will be the end of the virus.

If we plug the pen drive in some Apple device then there will be no activation of the virus at all.

Similarly natural virus has these particular key proteins in it's envelop which opens the door of the host cell. That is every living organism has different proteins supported by cholesterol in it's cell membranes which only allows the required molecules to enter into the cell. These key proteins in the virus envelop are very particular about the host cell, for example HIV can only infect human lymphocytes, not any other cell or not the lymphocytes of a dog.

Once the virus key proteins opens the lock of the host cell door, a passive entry of the enzymes and RNA in the the host cell is triggered. The enzyme and RNA then quickly starts synthesizing the proteins necessary for making the virus copieas by using the cell machinery. The cell now become a zombie, it doesn't now perform it's intended role but instead starts acting as a virus factory. When the cell becomes full of virus copies, a self destruct mechanism gets triggered, which destroys the host cell, releasing the viruses. The new viruses released, starts infecting more cells, each one of them produce many more viruses. Now the infected person can spread the infection through his body fluids like cough(mucus)/saliva/urine/feces/blood/genital fluids as per the infection. (Cough/saliva in the case of COVID-19, which gets sprayed when the infected person coughs or sneezes. This virus is heavy, so it doesn't float in the air, it falls down and remains on the surfaces in the vicinity of the infected, when a healthy person touches such surface, it picks up the virus and if the person touches it's nose/eyes/mouth with such dirty hands without washing then the virus reaches it's destination and starts infecting.)

Now the virus defence is done by our immune system by various ways like- killing such infected cells and stopping the reproduction of the virus or making antibodies which binds to the virus envelop which prevents the virus from entering any cells i.e. our cells now recognise it as a foreign body and don't allow it to enter the cell.

This particular Novel Corona Virus infects our respiratory tract lining cells which causes dry cough, fever etc.

Now there is some time gap between the entry of the virus in our system and experiencing the symptoms of the disease. This period is called the incubation period. That is the person is infected but doesn't show the symptoms of the disease. To understand this incubation period let's take an example of Terrorists vs Nation-

Suppose a handful of Terrorists enter a nation with an intention of creating a terrorist organization by recruiting the citizens of the same nation, brainwashing them, training them and then using them against the same nation. You can understand that this process will take time before it starts showing it's existence. At first no one will notice the terrorist, the terrorist will then try to recruit, brain wash, train the members; till then some good citizen will notice that something bad is going on, he will raise the alarm, but the security system of the nation will also be sceptical about the alarm so it will just inform a local patrol to check it out, and then when the local patrol will confirm the situation, a countermeasure will be taken, it may involve a limited attack if the situation is not severe, but if it's too late then emergency will be declared in the nation and all the resources of the nation will be used to defend the nation from the terrorist threat. All of the normal public of the nation will only suffer if emergency is declared otherwise it will be a local affair.

In the same way, if things go too out of hand then only our immune system declares an emergency, all the resources of our body are diverted towards our immune response, that is, all energy is diverted towards the immune cells, all other gets less energy, hence we feel weakness, all other processes are slowed down e.g. digestion, hence we feel nausea, nose starts running, more cough is produced to flush out the infection, temperature of the body is raised to help our immune system function more effectively. We call all these, symptoms.

What will happen next?

There are two possible conditions-

1) Positive case- The spread of the disease will soon be contained, the number of the people getting detected COVID-19 positive will start decreasing. And it will end soon.

COVID-19 vaccine trials get successful and we don't have to fear it anymore, all the life returns to normal in a month.

2) Negative case (Worst case)- The disease keeps on spreading rapidly, exponentially. Almost all the population on the Earth will get infected, but is it the end of the mankind? Is it where all ends?

Certainly not.

Law of natural selection / survival of the fittest :

We all have learnt the law of natural selection, the one who is fit to survive in an environment survives, others who can't- die. This is the nature's way of weeding out the weak ones.

There has been many such natural disasters in the past like, ice age, droughts, floods, tornadoes, meteor strike, many epidemics, pandemics etc. But still the life thrive. Because the survivers are stronger and they quickly take up the vacant places.

This period is the live demonstration of natural selection / survival of the fittest.

We are observing a history in the making. We will tell the tales of how we survived the COVID-19 pandemic, the lockdown period etc. to our children and grandchildren.

Not everyone who is infected by Novel Corona Virus dies, many have recovered totally and many will. The mortality rate is much less than 10% globally.

So what we should do?

Preventive measures prescribed by Government of India-

PREVENTION

But on top of that one should try to keep his or her immune system healthy by-

1) Eating healthy food- Eat home cooked natural food, prefer protein rich and low carb food, practice periodic fasting like eating only once in a day and only water otherwise for the rest of the day-once or twice a week (do check what suits you).

2) Exercise- Exercise 2-3 times a week(more is not needed), exercise is something which pushes you a little(not more, otherwise you would damage something more and never return to exercise) beyond your normal capacity. Exercise should include yoga, cardio and strength.

3) Rest- proper and enough rest is very very important for our immune system. Deep sleep is the best rest. Always take required amount of sleep, listen to your body to determine how much sleep you need, because there are no standards, every body has different needs. For example I need 9 hours of sleep every day, 2-3 hrs less sleep in a week leads to symptoms of infection. Whereas some of my friends need only 5-6 hrs of sleep every day. If you catch any infection and show any symptoms like cough, cold, fever etc. do sleep much more than normal till you get well. When we sleep, almost all of our energy is used to fight the infection and we recover soon. But if we keep working then our immune system gets less energy and you can imagine what will be the results.

This is samanyabuddhi.blogspot.com so how can we not think about wealth and happiness?

What should we do for our wealth in view of the COVID-19 ??

I am an eternal optimist, all global share market indices are down 20-40%. So I think it's a great opportunity to purchase great businesses at discounted prices. Creat a diversified portfolio of great businesses. You can directly buy individual stocks if you understand what you are doing, or can buy index ETF (Exchange Traded Funds), or if you don't understand that much, you can buy a diversified mutual fund of a reputed fund house or an index fund of a reputed fund house. Invest your money in a staggered manner so that if market guess up from here, you have something invested and if it falls further, you will have money to invest. Such opportunity comes only once or twice a decade so don't let it go.

What should we do for our happiness in view of the COVID-19 ?

Many are ordered to work from home (WFH) by their employers, so make the best of it, your travel time is saved, invest this time in the family. Spend quality time with your family. Spend time on your hobbies. Learn something online, cook, paint, sing, dance, do what you like and enjoy. Do remember-

The POWER is when,

You use ODDS,
To get EVEN.

So have a nice day.

Sumit,

The POWER is when,
You use ODDS,
To get EVEN.

Understanding financial freedom- Cats

I love cats. Cats are one of the many masterpieces of nature's adaptive engineering skills. Cats are very loving, soft, beautiful animals and also deadly, cruel, capable killers at the same time. The most important thing is they know which role to play at which time. A pet cat sitting on your side, expressing it's love for you with the deep and tender 'grrrrrr grrrrrr' sound can sense it's pray or enemy nearby and starts playing it's deadly killer role within a fraction of a second.

Actually I like all the animals in the CAT family, including Tigers, Lion, Leopard; the bigger siblings of our domestic cats. They are almost similar except size and strength.

But they all have one thing in common- "The Attitude".

They have a very distinct confident but carefree attitude. Big cats are really the king of the jungle. If you look at them, you will know, 'they are the undisputed king of the jungles'.

Our domestic cats have the same attitude, same everything, except the size.

As I like to observe and learn, I quickly learnt to understand when the cats are hungry and immediately give then the required food. So my pet cats don't have to worry about the food when I am there. So their Royal attitude remains intact in my company. But what happens when I am not there to feed them is a very interesting thing.

When I am not at home and my pet cats feel hungry, it has two options, either go out and search for a prey or to ask for food to my parents. The first option had very high uncertainty of getting food, they also have to compete with other animals which are after the same prey. But the second option offers some certainty. They will get food if they can convey the message over and over again. So most of the times the cats choose the second option. That is to ask for food.

(Domestic cats convey this message that they want food by, making that deep grrrrr, grrrrr sound and "myaaw, myaaw", simultaneously rubbing their cheeks, body and tail against our feet. (what a demeaning behaviour !!!) Demeaning because they don't do this the other times, that means they don't like doing it. At other times they are exhibiting their Royal attitude. To show their love they just sit beside us or on our laps or body and make that grrrr, grrrrr sound, or they just sit on your belongings like your quilts, bag, table etc. And look at you lovingly.)

Their whole Royal attitude is ruined when they ask for food. And the Royal attitude goes down and down as this process is repeated. But the process can be reversed if they are provided the food before they need to ask. Again their Royal attitude returns.

Amazing story isn't it!!!!

This story will become more amazing and fascinating once you substitute humans for cats and money for food and what a man does to earn the money. The story is equally true.

As domestic cats have two ways to get food we also have two ways to earn money-

1) Go out and earn money of your own.(similar to hunting, a way full of uncertainty, but full of dignity.)

2) Take a refuge to an employer and be a salaried person.(similar to asking for food to the owner by pleasing him, a way with a lot of certainty, but less dignity.)

(see my post on 'ONE IDIOT')

Similar to the domestic cats most of us also choose the option with a lot of certainty and keep doing the job for the sake of money. Even if we don't like doing that job we still keep doing it for the sake of money. We do it year after year and so on up to an extent where this demeaning kind of behaviour is so much ingrained in our brain that we no longer feel it as a demeaning task. We perform our own brainwashing without ever realising it. We even teach our children the same thing- ' to get good grades in the school and college so that you can land in a good paying job.'

It's like the proverbial 'BOILING FROG SYNDROME' (it is said that if we put a frog in a boiling water, it will immediately jump out of the boiling water, but if we put a frog in water at room temperature and slowly heat the water to boil, the frog will not jump out and die. It is because the frog is unable to notice the small changes in temperature of the water, even though the changes are deadly.) We seldom notice small changes in our life until its too late.

Or then there is a social proof bias preprogramed in our brain which prompts us to do what most others are doing.

All this results in to a kind of entrapment.

But don't worry, you can easily get out, just like my cats have found out their way. They just stay with me as they know, they will get food without having to ask or beg. So how can one get the money without asking or doing any job?

To know how read my posts on 3 MOST IMPORTANT ASPECTS OF LIFE - WEALTH.

Enough for today.

Hope you got the lesson from my cats as I did.

See you soon. Till then enjoy the life..

Sumit
The POWER is when,
You use ODDS,
To get EVEN.

She loves me...
She loves me not...

3 most important aspects of living -

Yesterday, at the end of my lecture under workers education program, a couple of workers asked me about my philosophy of life, any suggestion for them.. As the time for lecture was already over I gave them short answers and promised to go in to the details next time for sure. The topic of lecture had nothing to do with philosophy of life.

This incident cranked up my thinking process. This blog samanyabuddhi.blogspot.com is made for the same purpose, that is to spread what I have learnt and experimented till date. Why everyone should do all the hard work that I did while learning? and we have this platform for blogging provided by the Google to leverage and multiply my learning. Many successful and unsuccessful personalities knowingly or unknowingly contributed to my knowledge or experiences. So it is not possible for me to mention everyone. But I am going to mention the prominent ones as I will go through.

Before you get bored let's come to the point- my philosophy for life (and this blog too), revolves around the 3 pillars-

1) Health
2) Wealth
3) Happiness

All three are interdependent, we can not chase one and ignore others or we can not chase two and ignore the other one. All three must come together to live a meaningful life, or some may say successful life. We can say these three pillars support our life. If one is weak our life collapses, or if there is imbalance in the dimensions of each pillar then we can not live a balanced life.
We must work on all three at a time to get the best out of life. It is not that difficult, once you start, you will start getting the results and you will do more efforts automatically. This is a positive feedback loop. Like a snowball rolling down a mountain, your life will get bigger and bigger. The more you will get results the more will be the motivation.

To achieve this snowball effect, you must start now-

So here we go, one at a time..

1) HEALTH

Wise people say that, "Health is Wealth". It is true, if you are not healthy then you cannot enjoy your wealth or you will have to put a lot of conscious efforts to stay happy. Good health is the foundation for lasting wealth and happiness. Many studies have shown that healthy people receive more salary than weak people. Healthy people are perceived as leaders. The proof is, is there any physically weak actor doing a role of hero in super hit movies? Or which actors do you like? For examples the actors who played the character of James Bond like Daniel Craig, Pierce Bronson, Sean Connery etc.

Second advantage is that, a healthy mind resides in a healthy body. Generally weak and fearful people do illegal or unethical things, simply because they are trying protecting themselves from any imaginable attacks. While healthy people just know that they can deal with anything thrown at them so they just relax and concentrate on something important.

Now enough about the advantages of being healthy, there are lot of them coming to my mind, it will take month to write them down, and probably you also know many advantages and want to be healthy, otherwise you wouldn't be reading this blog.

Let's now think about how to become and stay healthy-

I recommend you to read my post, How to become Happy?? Then also read the post on Ageing and Anti ageing, then the language of exercise. These posts will give you the basic idea about how to become healthy.

I suppose that you have read the above posts. Now I will take you still deeper in the subject of health -

This pillar of health have 2 elements -

A) Exercise & B) Diet

This Exercise part is again divided in to two broad catagories-

I) Strength building exercise II) Stamina building exercise

Our body have muscle and bones arrangement, where muscle provides the force and bones act as lever and together they help us doing movements. These muscles which helps in the movement of our body are called as skeletal muscles. (they are attached to the skeletal or bones)

There are different muscles other than skeletal muscles, like our heart is made up of cardiac muscles, our digestive system also has muscles which does the movement necessary to mix the food with digestive juices and to push the food forward in to the digestive system. That is food is pushed from mouth to stomach to small intestine to large intestine and then out.(in between it gets digested)

Exercise has to do with working on skeletal muscles and cardiac muscles. Rest of the muscles also get strengthened as a side effect of exercise, because of increased demand from them and also the effect of growth hormones secreted by the glands in our body because of exercise.

Our muscles are made up of muscle cells. Muscle cells are made up of muscle fibres. These muscle fibres are made up of proteins.
There are 2 types of muscle fibres in our body - red and white. Red muscle fibres provide us stamina, that is they help us do repetitive movements like cycling, jogging etc. While white muscle fibres provide us explosive power, that is large force for small duration. For example lifting a heavy object. White muscle fibres produce their power without using oxygen, they develop fatigue very soon, where as red muscle fibres produce power with the use of oxygen, they can do the repetitive action for extended periods.

The ratio of this red muscle fibres to white muscle fibres is fixed for every individual genetically. But we have choice to develop the type of muscle fibres we require with the help of exercise.

To develop white muscle fibres we must do exercises which include lifting heavy weight with minimum repetitions. On the contrary to develop red muscle fibres we must do the exercises which include lifting medium weights with more repetitions. Cycling, jogging, trekking, circuit running, swimming also develops stamina.

I hope you understood the difference between I) strength building exercises and II) stamina building exercises.

Red muscle fibres also helps in producing explosive power but white muscle fibres can not work for extended periods. Red muscle fibres have this stamina because of their ability to store oxygen. Generally they can store oxygen required for the time of 6-7 seconds. After that if they don't get their oxygen trey start producing the energy without oxygen, thereby producing lactic acid resulting in to fatigue.

Further it is also useful to understand how our muscles get their oxygen -

Everyone knows muscles get there oxygen through blood. But there is much more going on. Oxygen rich blood is pumped from the heart through big blood vessels known as arteries. These arteries then go on branching and as they branch their diameter is reduced, also their wall thickness goes on reducing, this branching continues until the size of the blood vessel becomes more or less hair like. These hair sized blood vessels are called as capillaries. The oxygen and carbon dioxide transfer happens through these blood capillary walls. (carbon dioxide is generated in almost all the cells of our body when different constituents of the food we eat are burnt with oxygen to get the energy for doing required activities) These blood capillaries have very thin walls and are flexible to facilitate this oxygen and carbon dioxide transfer process.

These blood vessels and blood capillaries have network all over our body and they supply this oxygen rich blood to each and every cell of our body including muscle cells. They go through muscle bundles, but as I said these capillaries are flexible. So when our muscle is in relaxed condition, these capillaries remain open and are filled with oxygen rich blood, at this condition, oxygen from the blood is taken by muscle cells and carbon dioxide is given to the blood. So instead of oxygen now the blood contains carbon dioxide and muscles now have oxygen for approximately 6 seconds requirement. Now when these muscles are contracted to do some movement or activity, these blood capillaries gets compressed or squeezed, but o the one side, our heart is pumping the blood with a pressure (this pressure is known as blood pressure) while at the other side there is less pressure, so almost all the blood from the squeezed capillary goes to the low pressure side (out from the muscle bundle), there these capillaries starts converging, their diameter starts increasing, their wall thickness also increases, these blood vessels now has blood which is not under much pressure, therefore to prevent it from going backward, these vessels have non return valves at places, these blood vessels are known as veins. Veins contains the blood under low pressure so the walls of the veins are thinner than the arteries. Every time a muscle is contracted, blood is pushed in to these veins, these veins lead to heart. They are connected to the upper right compartment of the heart where this carbon dioxide laden blood is collected, this blood then pushed in to lower right compartment of the heart because of the arrangement of non return valves and movement of the heart. From this lower right compartment, blood is sent to the lungs.

Now in the lungs the blood vessels again gets divided in to small capillaries which are present near the inner membrane of the lungs. There are large number of air pockets in the lungs. These pockets provide huge area of oxygen and carbon dioxide exchange membrane, through which carbon dioxide from the blood is released in to air contained in the lung and oxygen from the same air is taken up by the blood. Because of the movement of our chest muscles and a diaphragm which is present just bellow our lungs, this carbon dioxide laden air is exhaled out through nose and mouth and then normal air from atmosphere is inhaled for the next breathing cycle.

Now these capillaries again converge and take this oxygen rich blood to the upper left compartment of the heart. This blood then goes to the lower left compartment of the heart through the arrangement of non return valves and movement of the heart. Then this oxygen laden blood is pumped by the lower left compartment to the whole body. (Including itself, as our heart muscles can only use the oxygen provided by the blood running through them in the capillaries. The heart attacks is meany times caused by blockage in this blood supply system to the heart muscles. Because of which our heart muscles also known as cardiac muscles do not get the needed amount of oxygen.)

This circulation of blood goes on till our death. This is how our muscles get their oxygen. You must have understood now why our muscles starts aching when kept contracted. Many times it is very painful to keel a muscle contracted for just a minute. It is because muscles do not get oxygen in contracted condition, blood can only flow through them inside capillaries when muscles are relaxed. Cyclical movements helps in blood circulation. Muscle contraction pushes the blood towards the heart and make room for oxygen rich blood coming from heart. Many times people who has to sit in front of computer for extended periods because of occupation have swollen feet. Or after long journeys we have swollen feet. The remedy is to get up and take a small walk after each hour or even less if possible.

The blood gets this ability to carry oxygen or carbon dioxide because of red blood cells and red blood cells get it because of haemoglobin (an iron containing protein).

Therefore whenever you do your work out, your muscles start healing and growing, grown muscles also have more oxygen demand, this means more haemoglobin in the blood, more powerful heart, more blood pumping capacity of heart, more capacity of lungs is needed.

And you know that our body is a COMPLEX ADAPTIVE SYSTEM.

Therefore to adapt to all this increased need our body responds by increasing all these supporting capacities. More muscle fibres are build up, more blood capillaries are formed, existing blood vessels increase their diameter( you must have seen professional body builders or actors with lots of visible veins all over their body), the size of the heart and strength of the heart also increases, each pulse becomes more powerful, so heart can now pump more blood with more force with each heart beat. As our skeletal muscles develops new and stronger muscle fibres and new network of blood capillaries, same thing happens with our heart.

All these changes are useful when we do heard work or exercise. But what happens to this increased capacity when we are not doing any hard work? At this time our heart rate falls much lower than normal simply because it can fulfil the requirement of body very easily when not doing hard work. Some sportsman has pulse rate as low as 30 per minute. That is less than half of the average human. Many divers have so much increased breathing capacity that they can hold their breath for up to 5 minutes while diving. Can you imagine doing it?

Our body is a superb piece of genius engineering of nature.

Respect it.

You must be saying we didn't touched the strength building and stamina building exercises much. We will do it in the next post. I think knowing our body and how it functions is important to get the full advantage of exercise.

Next post will be coming soon. Stay tuned..

And have a nice day..


Sumit
The POWER is when,
You use ODDS,
To get EVEN.