Do you know, you can be Crorepati by investing just ₹50/- Per Day!!

Friends, we generally spend ₹50/- on Tea & Cigar daily. I am not saying you stop smoking or drinking tea, just reserve additional ₹50/- a day and you cannot believe, it will convert to whooping One Crore in 30 years of time.

We all know equity markets in the short run may not give you ‘assured returns’, however, if you give it time, the short-term volatility outbursts can be digested and a certain amount of return can be expected.

At Retireby49, we were keen to find out the reasons why people still hesitate to invest in the equity markets. Recent days I have met so many investors and started checking what really bothered them and the fact was, a vast majority of Indian families are still hesitant to accept equities as a source of serious long-term investment.

This is despite the fact that the Indian equity markets have generated the best returns compared to any asset class over a rolling period of 10-years window.

In our quest to gain an insight into the people’s mental framework, especially while making investment decisions, we decided to find out the reasons behind this mentality.

After talking with people, we have arranged the results to find out the top four reasons that prevent people from participating in equity markets, and they are:

  1. People expect an assured fixed return from their investments
  2. They believe they lack the required knowledge to invest in the equity and equity markets
  3. Most people believe they do not have a sizable corpus to invest
  4. It requires large amount of money to invest in equities and this is rich people territory

 Here are some of our thoughts with respect to the above four points.

Expecting an assured return from the market is as good as expecting Virat Kohli to smash continuous fours & sixes in a test match. We know Virat would not smash fours & sixes, but rather focus on holding the fort and performing steadily as it is test match and not 20-20 match.

Likewise, markets in the short run may not give you ‘assured returns’, however, if you give it time, the short-term volatility outbursts can be digested and a certain amount of return can be ‘expected’.

In fact, you can convert the short-term market volatility into highly profitable opportunities if we stay in market for more than 10 years.

Lack of knowledge is understandable and it is easily solvable. If one wants to invest today and reap its benefits tomorrow, one has to do a bit of work today and also Indian government and SEBI has given various avenues to invest in equity markets like in the form of Equity based Mutual Funds.

Thanks to the internet, there is abundant information available online that will give you sufficient knowledge to get started. You may not believe just 2 -4 Hours a year is sufficient to identify quality equity diversified funds to invest or take help of good Financial planner for first time and then slowly you can invest on your own (Please make sure you are not getting into trap of Agent, identify advisor and not an agent)

Lastly, the argument of not having enough corpus/funds is perhaps the biggest mistake people do.

Let me illustrate why, with a simple example:

A young 24-year person has just started earning. His take home salary is ₹20k to ₹22k per month. He is a lavish spender and spends all the money he earns. Looking at his lifestyle a good friend of him advices him to save some money for the future.

Not wanting to save much, reluctantly he decides to set aside just ₹50/- per day for his future needs. Further, considering his good friend’s advice, he decides to save ₹50/- every day for the next 30 years.

He decided that the money is best invested in an equity mutual fund since historically a good equity mutual fund has generated a CAGR return of close to 15% (Returns will vary from fund to fund).

Now here is my question to you – Can you take a guess how much ₹50/- invested at 15% CAGR could grow at the end of 30 years?

In fact, I asked this question to our participants they made a simple calculation which goes like this –

“The guy saves ₹50/- per day or ₹1500/- per month. He invests for the next 30 years, which means he invests close to ₹540, 000/- i.e. ₹1500 per month x 12 months x 30 years. After considering the 15% returns most of them simply declared “At the most his money would have grown to ₹20 – 25 lakhs max and definitely not more than that.”

I asked why you think it would ₹20 lakhs, they said if we invest ₹150,000/-  a year in PPF it gives us just ₹40 lakhs, hence ₹5.4 Lakhs should not give more than 4 times of amount invested as returns and investment period is close to double.

The reason I asked this question to my colleagues was to observe how they would treat the 15% CAGR. They easily missed the point that the money is ‘compounding’ at the rate of 15% (~8 % returns in PPF is Doubled in 15 years doesn’t mean it will be 4 times because it is 30 years and 15%).

If you are wondering how much ₹50/- per day would grow when invested at 15% for the next 30 years, then hold on your breath – it would grow to a whopping ₹10,514,731/- (i.e. ₹1.05 Cr)!

Can you imagine that? At just ₹50/- per day, which by the way, is less than a cigar and tea with friends we spend every day can create wealth close to ₹1.05 Crore! How easy is that? This is what is compounding does to your money, it starts growing beyond your imagination!

So dear friends, you have to believe in the power of compounding and start investing today, no matter how big or small the amount is. There are many of you who can afford to save more than ₹50/- per day, so I would suggest you take the plunge towards long-term wealth creation today. After all, investing is not just good for you but for people dependent on you.

I know, now many of you are thinking numbers are looking good but are there really any such products? Just search on internet “equity mutual funds with returns of > 15% in last 20 years”, I can challenge, you will get minimum 10 fund names that gives > 15% returns.

Let me show you another dream as you were able to find 15% is possible if these returns are 18% then the same savings would be ₹2.1 Crore 😊. (Personal Disclaimer – I am personally clocking 18% CAGR from last 13 years by just investing in good quality equity mutual funds)

Good luck and happy investing!

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Disclaimer: The author is founder of The views and investment tips expressed in this article are of his own and not that of the website or its management. Please talk to professional Financial Planner / Advisor who can help in better financial planning.

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