OK, now that you understand equities a little better,
let’s get back to our engineer friend’s investments and see why we made
the outrageous claim.
When he started out in April
2008, he put a total of 40,000 in a top-rated equity mutual fund. Every
subsequent year, accounting for a 15% increase in his income, he put in
more and more money in that equity mutual fund. You can see in the table
below how much each of those amounts have grown to today.
Date of Investment
Amount Invested (Rs) | Value in October 2015* (Rs) | Multiplication Factor | |
April 2008 | 40,000 | 175,926 | 4.4x |
April 2009 | 46,000 | 251,421 | 5.5x |
April 2010 | 52,900 | 160,474 | 3.0x |
April 2011 | 60,835 | 159,887 | 2.6x |
April 2012 | 69,960 | 156,616 | 2.2x |
April 2013 | 80,454 | 180,514 | 2.2x |
April 2014 | 92,522 | 163,348 | 1.8x |
April 2015 | 106,401 | 107,432 | 1.0x |
As you can notice, Equity rewards Patience. The
investments in 2008 and 2009 have increased by more than four times.
This is what we meant when we said that equities can grow your wealth.
If you stick to it long enough, your rewards could go up by 5 times.
Here's how you can multiply your wealth by 5 times!!
Reviewed by Admin :)
on
August 25, 2016
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