Ah, the quest for the magic number – 5 crores in just 5 years! This dream is much like the aspiration of a young cricketer wanting to hit sixes in every over of a T20 match. While it’s exciting to aim for, the ground realities, like the bowler’s tricky deliveries, can often make it challenging.
Starting with ₹45,000 a month, to reach a target of 5 crores in 5 years, your investment would need to grow at an astonishingly high rate. The stock market, while promising, can be a double-edged sword. Although it has historically offered returns upwards of 12% to 15% for well-researched and diversified portfolios, aiming for such a high target in a short span is a tall order. And while using the Roots and Wings philosophy, focusing on stocks with strong fundamentals and growth potential can give an edge, achieving such a high return is still rare.
The LSG framework of Jama Wealth can guide the asset allocation – ensuring there’s a balance between liquidity, safety, and growth. It’s essential to remember, though, that higher returns often come with higher risks. As Benjamin Graham wisely pointed out, “The stock investor is neither right or wrong because others agreed or disagreed with him; he is right because his facts and analysis are right.”
Here is some math: Let’s assume a very optimistic and unrealistic annual return of 30%. If you were to invest ₹45,000 every month at this rate, by the end of 5 years, you’d accumulate close to ₹4 crores. This is still short of the 5 crore goal. Achieving the target would require an even higher annual return, which increases the risk considerably.
A word of caution: The allure of quick gains might draw you towards riskier assets or strategies. But, as SEBI stats show, ventures like derivative trading often lead to substantial losses for individual investors. It’s always best to avoid leveraged investing and other high-risk strategies.
To sum up, while aiming for 5 crores in 5 years is ambitious, the inherent risks involved in aggressive strategies can’t be ignored. The journey to wealth creation is often more marathon than sprint. And if you’re looking for someone to pace you through it, Jama Wealth’s PMS services and the guidance of a SEBI Registered Investment advisor might just be your ideal running mates.
