Guru says: Most Traders out there in Stock Market are Just to Buy Groceries! NO long-term goals.
In this article we can see what are the Purposes of value Investing! Once you understand the Purposes then you can decide what kind of Investor you want to be!
LACK OF MONEY IS THE PROBLEM OF WORLD!
As some genius said, Lack of Money is the Problem of World.. We are living in a Money Controlled World!
Let us see how “Lack of Money” is your problem too..
Most of Our Life Aspects are Controlled by Money
- We got college education paying yesterday’s money
- We are doing job for earning today’s money
- We are investing for future’s money
As a result we can see Problems of World is due to Lack of Money!
- Employees working under Pressure
- Peers fighting for a Promotion
- Frauds cheating People
- Marriages busted for Dowry
- Bank Frauds, Money Frauds, Stock Market Frauds
- Politicians lying on Promises
- Religions divide people
- Countries conducting Wars for resources
All these activities are directly or indirectly linked to one thing.. LACK OF MONEY!
Think for some time..
NOW you would agree the Solution we wanted is FIX Lack of Money!
As you are aware, we can make money in 2 ways:
- Active Method
- Work for making money
- More time you work More the money you make
- Passive Method
- Invest for making money
- Let money work for you & You have more time to enjoy your life
PURPOSE OF INVESTING
The PURPOSE OF VALUE INVESTING is to Make Money passively. This is to solve your current Or future “lack of money” problems.
There are mainly 2 Types for Investing:
- Wealth Creation
- Income Generation
Let us see what each one of these are..
Here you will be focusing on Amassing Wealth for Rich Outlook in the form of Money, Properties, Luxury Cars, Yachts etc.
Stock Market is Apt for Wealth Creation!
Stock Market helps Wealth Creation through Capital Appreciation.
Stock Market provides 50% ROI per year on average – compared with 8% of Fixed Deposits
Example: Infosys Investor gained 50000% returns in 20 years making ROI of 50% above per year.
Note: In Stock Market investments you will not be controlling the performance of your stocks. The stocks will perform based on their Management & Promoter decisions.
Here you will be focusing on Generating Income for Financial Freedom so that you can quit your monotonous job, have more family time, can go for world trip etc.
Stock Market is NOT for Income Generation!
The best Investment Vehicles for Income Generation are:
- Real Estate Rentals
- Fixed Deposit Interests
- Loan Money Interests
Note: In these investment vehicles you can control some of the performance of your assets. In this way you can Increase the ROI on it.
Example: Improving the Rental Property for Higher Rents.
Here you will be using Hybrid Approach to generate both Wealth & Income.
In this way you will get the Rich Outlook as well as Financial Freedom
Hybrid Approach is the BEST investment strategy!
Here one will be using Stock Market & Real Estate to form the Hybrid Approach and reach the Financial Freedom.
Scroll down to learn from a real-life example.
How our Client achieved Financial Freedom in 7 Years!
Many of you will be surprised to hear that Financial Freedom is possible in 7 Years or even 5 Years!!
During 2012 one of our Client started investing in stocks with a Capital of Rs. 30 Lakhs. He was buying, holding, re-buying & shuffling the Multibaggers for around 5 years to gain 300% Returns!!
(remember the Fixed Deposit ROI will be only 50% for the period)
Now he got his Wealth zoomed to around 1 Crore!
As you know, putting the money on Bank will generate only 10% Interest. As you know he cannot be Financially Free with Rs. 1 Lakh. This is because there is No Growth in the FD Income to tackle Inflation.
Here we advised him to switch to Real Estate Commercial Properties. This was to gain Rental ROI of 20%.
(remember the Rental Yield ROI on India residential properties is only 3%)
After doing the Construction Activities for 2 Years, he was able to Generate a Rental Income of Rs. 2 Lakh per month!!
Thus Financially Freedom was achieved in just 7 Years!
Now he does chase his Passion at Work running his own Company & Going Leisure Trips every 3 Months without worrying about the Control of Money!
STOCK MARKET vs MUTUAL FUNDS
Mutual Funds have restrictions like:
- Mutual Funds cannot Invest in All Stocks
- Min Capitalization Limit exists (Eg: 1000 Crore)
- Less Returns
- Annual Maintenance Fees exists
- Other Vague Charges
- Low Returns compared with Stock Market (20% vs 30%)
- Lack of Transparency on Internal Buy/Sell Transactions
Thus people chose Direct Investment in Stock Markets!
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