Generally Indian investors prefer to invest their money in Gold or Real Estate. They would avoid to invest money in share market thinking it is highly risky investment. In our non lasting quest to live better life, can we really afford to overlook investment in equity?

2. Would your 10gm Gold purchased in 2005
Now in 2015 become 25gm

3. Or your 1BHK bought in 2005
In 2015 become 3BHK

4. You must be thinking that is absolutely
impossible.
But it would have been possible have you
invested your money in share market
instead of Gold or Real Estate.
Can’t believe it. Look at these examples.

5. Price of one share of Larsen & Turbo on 01st April
2005 was 1022.20.
After that L&T declared
• 1:1 Bonus Share in 2006
• Then again 1:1 Bonus share in 2008
• & again declared 1 bonus share for 2 existing shares in 2013
In 2015, that 1 share you had bought in 2005, now becomes 6
shares. On 01st April 2015, price of one share of L&T was
1734.20 i.e. value per share now is 10405.20.
That means your investment grows 10times in 10
years or delivered 26.1% compounded return
year on year.

6. If you like branded gold jewellery, then you must be knowing famous
Tanishq brand. This brand is owned by TITAN Industries which is also
famous for its watches.
Titan Industries was trading at Rs. 240.8 on 01st
April 2005. Then it has declared 1:1 bonus & also splitting Face
value from 10 to 1 in 2011. So your one share bought in 2005 would
have become 20 shares. On 01st April 2015, price of TITAN share
was Rs.390.40. So value of your investment would have
been Rs. 7808 now.
That means your investment grows almost 32.5 times in
just 10 years or gives you whopping 41.6%
CAGR return.

7. It is impossible you have not heard about ‘Royal Enfield’ if you are mad
about motorbikes. This bike is manufactured by Eicher Motors in India
They also have joint venture with Volvo Group which manufactures
branded trucks & buses.
Eicher Motors was trading at Rs.302 on 01st April
2005. On 01st April 2015 price of one Eicher Motors
share was Rs. 16028.
Investment in Eicher Motors would have been 53.7 times in
short span of 10 years or astronomical 48.8%
CAGR returns.

8. 1gm Gold was costing Rs. 700 in 2005. Currently price of 1gm
Gold rose to Rs. 2,800.
So if in 2005 you would have invested Rs. 7,000 in L&T (which
would have bought 10gm worth gold in 2005), value of your
investment would have been 71,268. That means you could buy
25gms of Gold at current prices. Isn’t it
10gm would become 25gm in 10 years
But what if you would have bought TITAN Industries shares
instead of L&T. You could have bought 80gms of gold.
So doesn’t it make sense to buy TITAN shares rather than
buying jewellery from Tanishq store.

9. Price of 1BHK in Mumbai would have cost you 25Lac
rupees in 2005. Currently you would require 1.15 Crores
to buy the same 1BHK.
So if we assume instead of making down payment of 5lac for that
house, you would have bought Eicher Motors shares in
2005. Current value of that investment would have
been 2.65 Crores.
That means you could have able to buy 3BHK flat &
won’t even required to take Home Loan.
Isn’t it 1BHK become 3BHK in 10 years

10. You must be thinking companies like L&T, Eicher Motors, TITAN Industries are far & few.
Picking up such companies won’t be everybody's cup of tea.
You are absolutely right.
Then in such cases why not take help of professionals. Invest in
share market through equity mutual funds. Mutual funds won’t be able
to match spectacular returns delivered by individual stocks as they spread their
investment in different stocks & sectors.
Still out of 140 equity mutual fund schemes existed before 01st April 2005, 109 mutual
fund schemes able to deliver more than 15% CAGR returns for period between 01st April
2005 to 01st April 2015. Out of these 109 schemes, 32 schemes has given
more than 20% CAGR returns for the same period.
It means your investment would have grown 6 times which out
perform both Gold & Real Estate as the prices of Gold & Real Estate grows
only 4 times & 4.6 times respectively in this period.

11. But question still remain the same.
Answer is very simple to maintain pace with your Life Style.

12. Few years ago you would have just one Land line connection at your home.
Now you can find every family member engrossed with his mobile device

13. Your telephone expenses now increased from 500 rupees Land
line bill to 3000 rupees which includes internet data plans.
Do you think interest from your Gold investments will
pay your telephone bills when you will solely
depending on your savings.
OR
You going to exchange your 10gm Gold chain, pay
the bills & now you will have 9gm Gold chain.

14. Few years ago 4 year Engineering Course would have cost just
under 1 Lac.
Now you require to pay 1 Lac each year for the Engineering
Course.
& additionally if you are not looking for Post-Graduation like
M.Tech or MBA, degree won’t even hold any worth.

15. It is estimated that that one will require 40 Lacs for his child’s
graduation & post-graduation education 10 years later
considering 10% inflation in education cost.
Do you think you would able to sell only 1 room of
2BHK flat to fund your child education?
OR
You are also going to depend on high interest
bearing Education loans.

16. Just because price rose manifold doesn’t means you can sell
your 10gm Gold chain & would able to buy more than 10gm
gold with that money or you sell 1bhk & now with that money
you could buy 3BHK in same location. Price increase doesn’t
result into increase in purchasing power
Where your aspirations to live better life is ever increasing, risk
in investing in share market is worth taking. As it would be
the only investment which will increase your
PURCHASING POWER.

17. YOU
the money

18. I would like to hear more from you. Please leave your comments below.