How to build your networth?
Printed From: The Equity Desk
Category: Market Strategies
Forum Name: Identifying Multibaggers
Forum Discription: Discuss specific attributes that investors could look at while choosing multibaggers. Also point out certain factors that investors tend to overlook while finding multibaggers.
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=2628
Printed Date: 07/May/2025 at 1:36pm
Topic: How to build your networth?
Posted By: prabhakarkudva
Subject: How to build your networth?
Date Posted: 16/Jan/2010 at 8:57pm
I think there are enough people on TED who have built a sizeable networth by investing in the stock markets.Also there are more than enough people on TED who are trying to get there 
I would like to believe that all those who were successful started small and after a series of events made it big.Now i would like those successful people to answer a few questions for the benefit of the rest of us: 1)Was your success in the markets a planned effort?Did you visualize your networth multiplying manifolds when your capital was small and took some broad portfolio decisions that led to your success?Or was your success a matter of chance/opportunity and your keeping our cool at the right times? 2)How much risk did you take overall?Was your portfolio in a position where if something had gone wrong you'd have lost your shirt? What's the role of leverage?Is it possible to increase your networth disproportionately without leverage? 3)And at what point does one decide to "work for yourself" and use dividend income to run the gas,choola et al at home? If anyone has any questions related to 'building your networth' they can please add to the above. ------------- Take your chances and keep them in a box until a quieter time. |
Replies:
Posted By: 9StockPortfolio
Date Posted: 16/Jan/2010 at 9:12pm
I do not claim to be successful but would like to take this opportunity to share my thoughts on following questions.
1) Initially investing was not planned effort, First Beginners Luck, Then 2008 market crash taught me a hard lesson. then I started again with plan. 2) Planning & patience helped me to get past of the 2008 crash. I could recover my lost capital and over it 30% profit as i have mentioned on my thread.
1) I personally consider myself as High Risk taker. 2) There was nothing more left to happen in 2008, I was already down 60%. 3) Yes, Leverage is intergral part of my investing. 4) I personally believe that without leveraging it is impossible to increase your networth disproportionately.
Last year, i paid one EMI of my homeloan out of Dividend, it has just started. I will try to find more & more opportunities which will offer good sustainable dividend & some price appreciation. Thanks Prabhakar. 9StockPortfolio ------------- Pursuit of Value |
Posted By: Monkey
Date Posted: 16/Jan/2010 at 9:53pm
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I do not think I am qualified to answer the questions as I have not reached comfort levels as far as networth is concerned and I do not have any sucess story to tell as such. (Hope to get some over a period of time). But, these are good queries and I am curious to know views of members especially on point-3.
On thinking through it, I feel it is OK to hang boots if one's annual expense is 3% to 4% of investible networth, excluding self occupied house. This means if one's annual expense is 3 lacs to 4 lacs rupees, one needs one crore rupees networth. This networth can be emplyed to earn dividend yield enough to meet annual expense & which also rises over a period of time in line with inflation. For a person not comfortable betting entirely on dividend yield, there can be number of combination of debt and equity meeting the objectives.
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Posted By: prabhakarkudva
Date Posted: 17/Jan/2010 at 9:39am
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Thanks monk ji.But the real question is how does one go about chasing that one crore in the first place?Does it involve risking your entire networth on some great opportunity atleast once or one needs to use leverage or is it just plain chance? ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: basant
Date Posted: 17/Jan/2010 at 10:17am
If you want to do it in less time then "Risking large parts of your N/W on some great opportunity which arrive by chance. The importance of chance finishes the moment the opportunity comes in front of you. From then on its the ability to bet hard on the basis of the available information(human skill)." So chance is present for everyone not just the person who makes it big but the person who makes it big bets on that chance. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: 9StockPortfolio
Date Posted: 17/Jan/2010 at 10:55am
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@Basantji, Perfect description. Now Big bets using own money or borrowed is the second question. 1)If the person have enough money to bet on that chance, then no problem, but 2) If using available information(Interest rates & all) one can bet using some leverage, provided the returns from the workout are greater than the interest expenses and remaining profit worth millions. In simple words, If a person finds an opportunity that X will be next hot thing in demand, so he borrows money, and starts manufacturing plant and producing the X thing...I find no difference in this & appropriate borrowing for that Chance. ------------- Pursuit of Value |
Posted By: aloksahi1971
Date Posted: 17/Jan/2010 at 11:08am
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The forst part here is to build investable surplus.
Surplus can be had by earning much more than you spend ( note I have used the word Much).
Now this surplus generated must be used to invest. Investment oportunities rise every day.A clear understanding of the goal has to be there because this is your own money not the annuity of some insurance fund so likely expenses in time bound manner chalked out.
Live much below your means even if it means being snigered on by aquintenses who have a lower net worth but a much more flasshy life style.Belive me the paper profits on stocks brought give high and many people start to spend much more in anticipation.
READ 'The Millionare next Door'
As far as opportunities go I guess contracting and real estate work in Bihar will outstip all other investment returns in the next 5 years!!!!! ------------- Born To Golf forced to work. |
Posted By: vincent
Date Posted: 17/Jan/2010 at 11:24am
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3)And at what point does one decide to "work for yourself" and use dividend income to run the gas,choola et al at home? [/QUOTE] I recall reading in Beating the street by Peter Lynch, an example of living on investment income with a portfolio comprised of 100% equities. I wonder if Mr. Basant was inspired after reading this chapter? ------------- Time is your friend on the road to wellbeing. |
Posted By: basant
Date Posted: 17/Jan/2010 at 11:27am
I had bet with borrowed money though had some of my own also but at that time Pantaloon and TV18 just seemed to be the big opportunity. But here one size does not fit all. Unless the idea is really compelling in terms of gains one should not bet with borrowed money. Borrowing for quiet ideas can be done if the yield makes up for most of the interest costs. This is what Rakesh Jhnjhunwala did in the late 90's when he bet on Engineers India; BEL; BEML; GE Shipping etc.
Very sound argument but promoters do not get stopped out for margin calls and are not focussed on the quote machine. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: basant
Date Posted: 17/Jan/2010 at 11:29am
Peter Lynch Boss hai bhai!
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: praveen
Date Posted: 18/Jan/2010 at 12:17pm
I wanted to do something similar in Jan-Mar but couldn't do it becuase the cost of funds was too high for my comfort. Basantji,
Any thoughts on where to get leverage from at an acceptable cost of funds apart from using F&O? ------------- The quest for knowledge is a never ending Journey |
Posted By: tigershark
Date Posted: 18/Jan/2010 at 1:12pm
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sucsess in mkts is never a planned effort cos what was sucsessful shall be known only in hindsight, but the ability to understand and ride out the business thru its growth phase does require some planning ,the planning of doing nothing , getting off the bandwagon also does require some skill not planning and skill to ride and jump off comes only thru experience
------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: Monkey
Date Posted: 18/Jan/2010 at 1:30pm
I am doing it in traditional way of saving as much as possible from my salary income and keep it invested for long time to allow compounding.
I do not see any risk in diversified portfolio invested for long term in Indian market. I consider volatility as different animal than risk. For me, risk is defined as very high probability of earning returns less than bank FD or post office schemes over a long period of time. say 8 - 10 years, whereas volatility is defined as fluctuations of temporary durations, say 1 - 2 years, however wild it may be, in market value of portfolio. I can digest volatility quite well based on my experience of last two years.
Leverage acts like amplifier on both ways. If you get it right you reach your goal quickly and if you get it wrong, it will take more time than normal. I am not using leverage as of now. But, I am thinking on going long Nifty future and keep revolving it on expiry or buying long dated Nifty calls if and only if market gives a big time opportunity, say 1/3 correction from current levels.
Importance of chance in life can not be ignored. However, few have ability to recognise it and act big way on it. As of now I do not consider myself having such ability but I do aspire for the same.
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Posted By: prabhakarkudva
Date Posted: 18/Jan/2010 at 1:34pm
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Thanks monk ji.
PS: Tigershark ji,your inbox seems to be full and yes it is me. ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: tigershark
Date Posted: 18/Jan/2010 at 1:58pm
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prabhakar in 93-94 i never knew infy will becom so big ! the planning came in 2000! i have sent yu a friend request at least one ted member knows how yu look and yu look good
------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: prabhakarkudva
Date Posted: 18/Jan/2010 at 2:06pm
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Ha ha thanks for the nice words tigershark ji(I am not sure if i am allowed to divulge your real name).i will add you once i get home.Facebook is blocked in the office for obvious reasons.Also can you elaborate a little on the planning that you did after 2000?
PS:BTW i've been to Goa only once and i loved that place. ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: basant
Date Posted: 18/Jan/2010 at 3:02pm
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If yo want up to Rs 20 lacs then ICICI or any other bank is there if you want more hen there are these NBFCs which have no such upper limit. But I repeat. this is dangerous and has the power to wipe out the entire portfolio so only if one is willing to cut the losses should one go in for such an arrangement plus there have to be real compelling opportunities in the market. QUOTE=praveen]
I wanted to do something similar in Jan-Mar but couldn't do it becuase the cost of funds was too high for my comfort. Basantji,
Any thoughts on where to get leverage from at an acceptable cost of funds apart from using F&O? [/QUOTE]------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: praveen
Date Posted: 18/Jan/2010 at 3:07pm
Cost of funds via banks, NBFC etc would be over 13-14%. I was looking for funds at around 10% or lower. I wanted to do in a company so I can enjoy tax advantages on the same.
Also I understand the risks perfectly well. I generally never employ any leverage and neither do I plan to do so under normal circumstances. But Jan-March 2009 was exceptional time. ------------- The quest for knowledge is a never ending Journey |
Posted By: TCSer
Date Posted: 18/Jan/2010 at 3:21pm
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I have built up my entire capital by using leveraging.Remember to save 10 lacs it will take ages but u can easily get a loan of 10 lacs.Important point is where do you invest that leveraged sum & the return you get should be mare than waht you have to give.
I started out with Maruti IPO in 2003 where even IPO application of Rs 1.25 lacs was being finaced thru 20 % margin money.SO instead of 1 application I was able to put in 7 applications & held 2000 maruti shares allotted for next 6 years.
Further I follow the adage that if the promoters are ethical & there is growth in the sector one should hold on.This I learnt the hard way after selling out cheaply several multibaggers like Divis Lab,Educomp,AIA Engg,PNB,IOB,Everest Kanto,Solar explosives & so may others.
Yes one should grab the opportunity whenever it present with gutso.This is a calculated risk one has to take.In my case when TCS IPO came there was an maximum individual employee quota for nearly 3000 shares.The quota was very poorly subscribed but I took loans of all variety left ,right & center & applied in toto.
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Posted By: tigershark
Date Posted: 18/Jan/2010 at 3:45pm
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be careful all yu loan against shares people yu are getting interested in taking loans bcos stock prices are going up the real time to take a loan and to to take that gamble which would have made/broken yu was pre election.pl do not chase prices
------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: smartcat
Date Posted: 18/Jan/2010 at 3:49pm
| Listen carefully when Goan people give advise on gambling... |
Posted By: kulman
Date Posted: 18/Jan/2010 at 3:55pm
Very crucial. Munger calls it: assiduity |
Posted By: FutureBull
Date Posted: 18/Jan/2010 at 3:57pm
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I am following simple strategy..by saving as much possible and investing with some short term trading..as mentioned by fellow boarders one needs to build handsome surplus to hang boots.. i think one needs at least Rs 5 Cr(without own home) to stay comfortable for times to come which would include kids' education, home loans and keep following one's passion i.e. "investing"..as an ordinary investor one might be required to keep good amount in liquid/debt form to take care of 3-5 yrs of expenses for bear run or other shocks...
I did use ready credit facility provided by Citibank for a month with almost negligible cost..i drew arnd 1 lac from that facility and bought Lupin in delivery after giving some thought(in fact wanted to buy futures of Yes Bank).. and i got shock when it went down by 5% next day but by end of month made around 12% and paid back to Citi on last day of the month with 0.8% gross cost including tax & fees which was supposed to be free..anyway i decided not to do it again .. i was very sure about Lupin as it was going through very strong rerating.. it might have gone wrong but my luck was good enuf.. I have decided not to use leverage until i'm 110% sure.. ------------- ‘The market always does what it’s supposed to — BUT NEVER WHEN’. |
Posted By: kulman
Date Posted: 18/Jan/2010 at 4:01pm
A bubble like situation is getting created in LOAN AGAINST GOLD JEWELRY. |
Posted By: prabhakarkudva
Date Posted: 18/Jan/2010 at 4:10pm
Kulman ji, Can you please elaborate on this?Some stocks like Mannapuram Gold finance have done quite well and as usual after having done well a lot of MFs are covering this stock. ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: kulman
Date Posted: 18/Jan/2010 at 4:22pm
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People are thinking that Gold can only go up from here (they may be right) and are borrowing against jewelry. The worse part is that majority of the proceeds are getting used in chasing 'speculative investments' like Calls, Puts and Futures. May god bless them. |
Posted By: tigershark
Date Posted: 18/Jan/2010 at 8:15pm
------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: 9StockPortfolio
Date Posted: 18/Jan/2010 at 8:16pm
Me too, now i consider myself leverage free because i have generated more than what i borrowed. The total profit has been locked in the FDs. Pvt. Banks offer loan at 17% monthly reducing for 4 years tenure. The effective flat rate comes around 9.6% pa. which I think quite good. However if all the petty/personal loans could be collaterlized against primary home then effective interest rate comes around 4-6% pa and loan tenure is equal to home loan tenure. This will have two benefits. Returns from the market & Tax Benefit on interest paid on loan. Keep It Short & Simple ------------- Pursuit of Value |
Posted By: 9StockPortfolio
Date Posted: 18/Jan/2010 at 8:19pm
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We are NOT advocating Leverage & Invest on this thread. If properly used Leverage can make fortunes. it's a double edged sword. ------------- Pursuit of Value |
Posted By: tigershark
Date Posted: 18/Jan/2010 at 8:20pm
------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: TCSer
Date Posted: 18/Jan/2010 at 9:14pm
| ICICI & HDFC Bank LAS accounts are offering interest rates@12% which is quite positive. |
Posted By: Monkey
Date Posted: 18/Jan/2010 at 9:36pm
| I am curious to know from anyone who was leveraged in Jan '08 about how the borrowings were handled and what was experience like. |
Posted By: TCSer
Date Posted: 18/Jan/2010 at 9:54pm
| Yes I was but not to the extent of 100% of my portfolio & completley exited the leverage by selling to the extent required in April 2008. |
Posted By: FutureBull
Date Posted: 18/Jan/2010 at 9:58pm
i know one of my close Gujarati friend who leveraged aggressively in Jan'08.. he could not square off due to busy schedule in office along with me.. i was giving him company while sweating in AirCon. office ------------- ‘The market always does what it’s supposed to — BUT NEVER WHEN’. |
Posted By: aloksahi1971
Date Posted: 18/Jan/2010 at 10:12am
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I had leveraged my self for Rpower IPO and REC . Rec paid back . RPOWER I am in love with still hold it. The cash was returned from income in the comming monts and sale of FD I finnaly got out of the rut in SEPTEMBER 2008. But this was a learning exp. so that I never ever will make a trading call a investment bet ever ever again.------------- Born To Golf forced to work. |
Posted By: basant
Date Posted: 19/Jan/2010 at 9:35pm
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A
small chance of distress or disgrace cannot, in our view, be offset by
a large chance of extra returns. If your actions are sensible, you are
certain to get good results; in most such cases, leverage just moves
things along faster. Charlie and I have never been in a big hurry: We
enjoy the process far more than the proceeds - though we have learned
to live with those also - Warren Buffett ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: praveen
Date Posted: 19/Jan/2010 at 10:02am
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For discussions on loan rates and calculation techniques please go to the following thread
http://www.theequitydesk.com/forum/forum_posts.asp?TID=2636 - http://www.theequitydesk.com/forum/forum_posts.asp?TID=2636 ------------- The quest for knowledge is a never ending Journey |
Posted By: 9StockPortfolio
Date Posted: 26/Jan/2010 at 9:22pm
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What is investment leverage? Investment leverage, simply put, is borrowing to invest. That is, it is using someone else’s money to achieve your investment goals. Whether you know it or not, you may have already taken advantage of this strategy. For example, if you’ve had a mortgage, a car loan or loan for child's marriage, you’ve used someone else’s money to achieve your goal of home ownership, higher education or a more comfortable retirement.Investment leverage is similar to the examples above. Leverage is simply borrowing money to purchase investments, with the goal of achieving greater wealth. Now, it’s probably easy for you to see how a mortgage can help you achieve the goal of home ownership. However, it may be less clear how taking out a loan to buy an investment can help you achieve the goal of greater wealth. With traditional investing, you set aside a portion of your income each month to purchase investments and your investments gradually grow over a long period of time. With leveraged investing, you take out a loan and make a single large investment purchase on day one. Then, you set aside a portion of your income each month to make interest payments on the loan. The amount you pay for loan interest may be the same as the amount you would normally contribute to a traditional investment plan. But while your “out of pocket” costs may be the same under both strategies, leveraged investing has the potential to generate far greater returns. Here’s why: Compound returns. Compound returns refers to the fact that investment growth accelerates over time as the growth from one year is added to your initial investment to create a larger investment that can grow the next year, and so on. The key to successful compounding is having the largest possible amount growing for the longest possible time.While traditional investing benefits from compound returns, it fails to fully take advantage of them. Assume you have 15 years to invest and plan to make regular contributions each year. Only the contribution you make today will grow for the full 15 years. The contribution you make one year from now will only have 14 years to grow, and so on. With leveraged investing, you contribute a much larger amount on day one and the whole amount can grow for the full amount of time, say 15 years. The effect of compound returns is much stronger with leverage, which can result in better investment results over the long term.
Risks Before deciding to invest with leverage, it’s important to understand that this strategy involves a greater degree of risk than traditional investing. If you use your own cash to purchase an investment, your gain or loss you experience will equal the gain or loss of the investment. However, if you use borrowed money to purchase an investment, the gain or loss you experience will be greater, relative to the performance of the investment.In addition, regardless of how your investment is performing, you’re still obligated to pay the interest on your loan. Investment leverage can be a powerful tool for accelerating investment growth. But be sure you understand and are comfortable with the potential downside before you decide to use this strategy. ------------- Pursuit of Value |
Posted By: bearish
Date Posted: 16/Feb/2010 at 6:32pm
| For Senior Teddies : If i as a beginner am not able to leverage and count on averaging out over the long term through monthly contributions into select stocks with say a small capital of 1 Lakh, Is it worth it at all or should i just stick to mutual funds thru SIPs? I am often intimidated by the kind of money one requires to deploy over a period of time to generate substantial returns and build a net worth. I often hear people say that to buy stocks in very small quantities is pointless even if it adds up over a period of time. |
Posted By: 9StockPortfolio
Date Posted: 16/Feb/2010 at 8:41pm
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@bearish Leveraging requires little more risk appetite. If you have a sure income stream like salary, you can try with small leveraging. For example if you set aside Rs.2850 every month (Recurring deposit@7%), it will take you 32 months to accumulate Rs.100000. But with the same amount 2850 as EMI, you can have Rs. 100000 at day One to Invest in the market and you have loner period to repay the loan say 48 months. Also you need to understand how much interest you are paying against this leverage and how much you can earn through market. If your plan turns against you, you will lose your borrowed capital plus you will have to pay entire capital + interest from your alternate source of income. ------------- Pursuit of Value |
Posted By: TCSer
Date Posted: 16/Feb/2010 at 10:28pm
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With leveraged money good quality IPOs provide good returns by taking advantage of retail quota. Thumb rule is applying only in those IPOs which see heavy oversubscription in QIB N HNI category.One can get excellent return on listing itself. With typical family one can apply in the name of husband,wife,2 kids n HUF besides parents.At time u get big lottery like cox n kings,jubilant foodworks. |
Posted By: saspath
Date Posted: 17/Feb/2010 at 12:41pm
| Some one help me in finding out TED-XI? |
Posted By: chriskb
Date Posted: 17/Feb/2010 at 8:27am
| Leverage can make you look a like a genius in good economic times but it will turn you into a dumb ass during bad times. |
Posted By: Khan
Date Posted: 17/Feb/2010 at 9:28am
http://www.theequitydesk.com/forum/forum_posts.asp?TID=429&PN=1 ------------- If you do what you've always done, you'll get what you've always gotten |
Posted By: kulman
Date Posted: 17/Feb/2010 at 11:22am
True. As a wise gentleman says: If you're smart, you don't need leverage. If you're dumb, you have no business using it. |
Posted By: bijoy_ajj
Date Posted: 22/Apr/2010 at 2:02am
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Basantji,
Thanks for creating such a nice site..
 i have been a member in this forum for last 6 months..The quality of topics coming in TED are simply outstanding.. Its nice to get to know how financially successull people made there own fortune out!!.. Thanks everyone for sharing your valuable life informations.. Its such a big gift for yougsters like me who are just in the starting of our career.. |
Posted By: basant
Date Posted: 22/Apr/2010 at 7:49am
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Thank you. Its all a collective effort and I am just a facilitator. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: yogishkamath
Date Posted: 23/Apr/2010 at 4:12pm
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Well, I am in no hurry either. Modest levels of leverage are okay, but even in a very undervalued market, we need to remember the fact that the markets can remain irrational longer than we remain solvent. |
Posted By: yogishkamath
Date Posted: 23/Apr/2010 at 4:35pm
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I think it is safer to use leverage and invest in "pre-launch" offers of A-grade builders (to preclude the possibility of the builder taking off with your money), cash out when the property gets launched/completed and deploy the profits in the stock market. This can be done with modest starting capital of even 5 lakhs or so. One needs to have the financial wherewithal to pay pre-EMIs for the duration of the loan of course. This is a losing strategy if the property market runs into some unexpected headwinds, but those happen much less frequently than corrections in the stock market. Methinks this is less risky than using leverage directly in the stock market ..... What say you ? |
Posted By: studentoflife
Date Posted: 23/Apr/2010 at 4:54pm
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In retrospection I find that even an investor with modest means could have become very well off if he had invested in the right stocks in Jan 2009. But so one question to all of you is whether you guys found the right opportunity in the bear market,bull market or market is irrelevant..
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Posted By: yogishkamath
Date Posted: 23/Apr/2010 at 6:30pm
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I doubt if it is possible to have become well off if one invested in Jan 2009 with modest means. I don't think anybody could plausibly have got more than a 6-7 bagger on one's entire portfolio over the last year.... modest*7 = little less modest, but not well off. |
Posted By: j2eeprofessiona
Date Posted: 23/Apr/2010 at 8:18pm
now that depends on the definition of well off. whats ur definition ? |
Posted By: yogishkamath
Date Posted: 26/Apr/2010 at 1:04pm
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1 crore + a house (or enough to buy a house without having to borrow) |
Posted By: j2eeprofessiona
Date Posted: 26/Apr/2010 at 1:38pm
now this is not a great definition. it depends on your starting amount if you could get 1 cr + house after having a 7 bagger portfolio ? if you start with 25 lacs 25*7 would yield 1.75 cr... by ur definition, well off.. |
Posted By: yogishkamath
Date Posted: 26/Apr/2010 at 1:52pm
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Yes, but 25 lakhs is not a modest amount by my definition :) To clarify: < 1 lakh : Too poor to invest 1-5 lakhs: Modest 5lakhs - 10 lakhs: Level 1 of better than modest but not quite well off :D 10 lakhs - 25 lakhs: Level 2 of .... 25 lakhs - 50 lakhs: Level 3 of... 50 lakhs - 1 crore: Level 4 of..... 1-10 crore: Well off 10-50 crore: Rich 50-500 crore: Super rich 500-5000 crore: Hyper rich > 5000 crore: Rich enough to retire :) |
Posted By: yogishkamath
Date Posted: 26/Apr/2010 at 2:04pm
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It's very hard to go up more than a level in one year unless you are leveraged and/or very very lucky. Last year was extraordinary. We aren't going to get such a year for a very long time. |
Posted By: j2eeprofessiona
Date Posted: 26/Apr/2010 at 2:23pm
you do not need good year to build ur networth. the beauty of stock markets is that you need a tinge of luck combined with good research and a strong conviction. if ur research is good than you do not need to track the sensex, the individual stocks that comprise ur portfolio should go up. atleast with the god's grace mine is going up big time and am sure i am not alone. |
Posted By: yogishkamath
Date Posted: 26/Apr/2010 at 3:05pm
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Well, I do agree that good research and conviction will give good rewards, but it takes time. We won't get a 5 fold increase in the value of our portfolio unless there is a strong tailwind of the sort we had last year. Even with a decent CAGR of 30 %, it will take 6 years to quintuple your money. |
Posted By: j2eeprofessiona
Date Posted: 26/Apr/2010 at 3:20pm
30% CAGR is ok for people with less risk apetite. but not for higher risk apetite guys |
Posted By: LearningToFly
Date Posted: 26/Apr/2010 at 3:35pm
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What...
30% CAGR is just ok for less risk appetite???
I don't think there is anyone on on the planet who has achieved this CAGR for 20-30 years. ------------- Success... at all cost. |
Posted By: yogishkamath
Date Posted: 26/Apr/2010 at 3:37pm
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"Aam aadmi" like me is happy with 30% CAGR. If done for 40 years with starting capital of a "modest" 5 lakhs, you end up with 1800 crores !!! |
Posted By: j2eeprofessiona
Date Posted: 26/Apr/2010 at 5:20pm
yes, i know the famous example of respected mr. warren buffet has around 23% CAGR, but so far with god's grace i have done much much better than 30% CAGR. lets see, what more life has in store for me. till then... i'll let my research back my returns. |
Posted By: vivekbhauka
Date Posted: 26/Apr/2010 at 5:27pm
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talking about carg is useless unless u talk about the interest rates of that country.if intyerest rates of a country is normally 30% then a cagr from stock markets at 30% is nothing.i can simply do a fixed deposit.
in usa interest rates risk free returns--which i say is suppose 3-4%.there carg of 24% is different than in india-(interest rates 8% ppf-nsc)carg of 24%.here carg will be inexcess of 35-38% if u take into account the interest rates. same thing applies to p/e levels.if interest rates are low as in usa p/e will be high.but in high interest rates p/e of that country should be low.u cant compare country wise p/e ratio without keeping a/c interest rates differnetials. |
Posted By: yogishkamath
Date Posted: 26/Apr/2010 at 5:48pm
30% CAGR in India, not Zimbabwe Let's say it becomes 24% adjusted for inflation. (Assuming 6% inflation) So, 5 lakhs becomes "only" 273 crores (inflation adjusted) in 40 years. |
Posted By: somu0915
Date Posted: 26/Apr/2010 at 5:50pm
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Congratulations on 30% yield from Stock market. However compounding smaller sums of money is easy. The problem magnifies when the money compounds and then it becomes big. Then compounding it at the same rate is a tough job. |
Posted By: yogishkamath
Date Posted: 26/Apr/2010 at 5:55pm
| When did you start investing j2ee ? |
Posted By: LearningToFly
Date Posted: 26/Apr/2010 at 6:00pm
Good to know that. This is really amazing. ------------- Success... at all cost. |
Posted By: vsb2pwn
Date Posted: 26/Apr/2010 at 6:20pm
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Wise men never disclose the money they accumulate just the way wise women never disclose the years................
I assumed J2e knew that...............
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Posted By: vsb2pwn
Date Posted: 26/Apr/2010 at 6:23pm
I would have rather been intrested in where (which scrip) ???????
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Posted By: j2eeprofessiona
Date Posted: 26/Apr/2010 at 6:42pm
i am talking about india and irrespective of interest rates (which were obvoiusly never 30%) i am quite comfortably over 30% CAGR.
i do not get this funda at all.... |
Posted By: j2eeprofessiona
Date Posted: 26/Apr/2010 at 6:43pm
i started investing in 2002.... i have always been facinated with micro caps... |
Posted By: j2eeprofessiona
Date Posted: 26/Apr/2010 at 6:47pm
 good one..
yes which would be value today at around 30 cr inflation adjusted ...which atleast by my standards is great..... |
Posted By: j2eeprofessiona
Date Posted: 26/Apr/2010 at 6:48pm
this is my thinking...
right... |
Posted By: j2eeprofessiona
Date Posted: 26/Apr/2010 at 6:49pm
i agree, even i would be ... 1800 cr would be like 180-200 cr in present value with average 6% inflation. |
Posted By: j2eeprofessiona
Date Posted: 26/Apr/2010 at 6:57pm
yes some you are right. thats why i said that lets c what's in store for rest of my life |
Posted By: j2eeprofessiona
Date Posted: 26/Apr/2010 at 7:00pm
vsp2pwn, to be honest i cannot deny that god has been too kind on me. my convictions was fortunately backed by the company performances. and yes i would never disclose my absolute worth as i never disclose my portfolio. its way too personal man. |
Posted By: SK1076
Date Posted: 27/Apr/2010 at 4:34pm
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Posted By: SK1076
Date Posted: 27/Apr/2010 at 4:35pm
Maths was never so interesting............This is like defining All forms of Wealth
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Posted By: basant
Date Posted: 27/Apr/2010 at 7:54pm
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I seriously doubt if there are more then 25 people in india who are above Rs 100 crores only on the basis of investying and that excludes a) PMS b) Leveraged trading c) Inheritance and d) Salary or other income. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: yogishkamath
Date Posted: 27/Apr/2010 at 9:17pm
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I was just humorously trying to get across the point that you can't become wealthy in a year. :) And here's hoping that some people in TED join those 25 ! |
Posted By: tigershark
Date Posted: 27/Apr/2010 at 9:27pm
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according to jake bernstein(author market masters) it takes roughly 20 yrs to be an overnight success in the markets.wealth creation is a process which even goes beyond ones lifetime and never a final destination
------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: studentoflife
Date Posted: 27/Apr/2010 at 10:38pm
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Posted By: j2eeprofessiona
Date Posted: 27/Apr/2010 at 11:23pm
dont tell me ur a .NET guy praying for death of j2ee .... honestly man its difficult to take out j2ee out of tech world... lots of stuff needs platform independence...... |
Posted By: bijoy_ajj
Date Posted: 27/Apr/2010 at 1:56am
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shift + del
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