look back and go to your childhood. Growing up, there was a point of time in your life, you promised yourself “One day I will earn millions and billions of rupees and get a lavishing house, buy the car of my dream, go on a world tour etc.”. Then you grew old and faced life. Learnt the darkest lessons and understood how things work in real world. All our aspirations, dreams, desires became a thing of past.
A lot of us are busy in our jobs, business or profession and have no time to plan and research various fields for investment so that we can become a crorepati and live the desired life. Our schedule is so packed, that we do not have any time for planning to invest our savings or park our funds in such places where we can get handsome returns. And then, we blame each and everything possible for not achieving our dreams.
So, how can we take care of this dream of ours and work towards achieving it? STOCK MARKET. Yes, it’s possible to be a crorepati by stock market investment and achieve our dreams and that too in a less risky way. In this article we are going to discuss how this can be done.
2. Discipline: – You have to make investments in a disciplined manner, after properly researching and analyzing the stock. You have to invest at regular intervals or as the opportunity comes. You should not deviate from the plans unless necessary.
3. Courage: – Any negative news will impact stocks, resulting in a fall in stock prices and any positive news will impact stocks, resulting in a rise in stock prices. You should have courage when stock prices fall and not exit from the market. Remember, the trick is t be invested in quality stocks to be a crorepati.
4. Quality stocks: – Our investments should be done only in quality stocks. A Company which has proved itself time and again and has given positive returns to its investors. A company which has increased its profit year on year basis for a long period of time and which has a excellent reputation. Top 10 NIFTY 50 stocks can be said quality stocks.
5. Compounding: – It is the eighth wonder of the world and this is the most important factor in your journey to become a crorepati. Compounded annual growth rate (CAGR) is the measure of growth over multiple periods.
|Name of Stock||Initial Investment||Monthly contribution||CAGR(%)||Years||Final Balance|
|Reliance Industries Ltd.||500000||8000||12||18||1,03,52,188.00|
|TATA consultancy services||500000||8000||31||10||1,69,69,730.00|
In the above table, we have considered the top 5 NIFTY 50 stocks. As you can see, we have considered an initial investment of Rs. 500000 and a monthly investment of Rs. 8000. CAGR shown is the 10-year compounded return given by the stock. If we would have initially bought stocks worth Rs. 500000, 10 years back, and would buy stocks worth Rs. 8000 every month for the remaining duration of investment in a disciplined manner, a total investment of Rs. 14,60,000 in stocks of TCS will become Rs. 1.70 Crores in 10 years.
It should be noted that, all the companies considered are good quality companies and have increased wealth of their share holders over period. They have increased their profits year on year basis. Although, same returns cannot be expected for future but there will be a high probability of getting the CAGR around the same figures. It is not that these companies have pleasant 10 years. There were some times when economic factors were not favorable for them. They have seen the good and the bad times in the past 10 years and ye managed to give good returns.
Now, what should be our plan of action, you have to identify any good quality stock from NIFTY 50. Analyze its business model, try to predict its future based on its market size and share, number of competitors, products offered by the company. Take advise from your financial advisor. Ones all these things are done, start investing and be invested in the stock as per the plan and enjoy your journey of becoming a crorepati.
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