How SIPs Create Massive Wealth: Power of Compounding ft Gajendra Kothari
Published: 2025-02-24
Status:
Available
|
Analyzed
Published: 2025-02-24
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Speaker aims to achieve 100 crores before their 50th birthday.
"And before my 50th birthday I have to become 100 crores"
Pending
An initial investment of 8.7 lakhs in a tax-saving fund grew to approximately 35 lakhs with a compounded return of around 18.6-19%.
"8 lakh 70000 has become approximately 35 lakhs 35 lakhs 35 lakhs compounding at the rate of almost 19 per 18.6"
Pending
Two mutual fund investments yielded returns of 17.6% and 20.3% on average, with one crossing 45 lakhs in value.
"and in one it has crossed 45, you see its return, in one the return is 17.6 and in the other it is around 20.3 average %"
Pending
A guru in compounding grew wealth from 0 to 1000 crore in 30 years, and then to 5000 crore in the subsequent 9 years, with significant market fluctuations along the way.
"he said you can do it and in his journey Arunima has fallen more than 50 times, once at 70, 100 became 30, 30 of 100 crore, it took us 30 years to take it from 0 to 1000 crore and in the next 9 years 1000 became 5000 crore"
Pending
Speaker reiterates the goal of accumulating 100 crores before their 50th birthday.
"and before my 50th birthday, I have to make 100 crores"
Pending
A strategy involving a monthly investment of 4 lakh rupees on YouTube, with an annual 10% increase in SIP.
"I have to put 4 lakh rupees per month on YouTube, and every year I had to increase the SIP from 10"
Pending
Aggressive investor projecting 100 crores wealth with a 15% annual return.
"if the return comes at 15, then 15 is a very high return, right, but because I am an aggressive investor and I have been from this industry, so I thought for myself that if it comes at 15 then 100 crores"
Pending
Liquid mutual funds offer slightly better returns (6-6.5-7%) than bank FDs.
"and I get a slightly better return on 6/65/7, that is, than bank FDs."
Pending
Public Sector Undertaking (PSU) equities had negative returns over the preceding 10 years.
"because the last 10 years' returns were negative in PSUs"
Pending
Speaker began investing in PSU funds in 2020 when they were out of favor.
"I started investing in the PSU category in 2020 when the whole world hated PSUs"
Pending
An investment of approximately 37 lakhs in a PSU fund grew to nearly 97 lakhs by July 2024.
"by July 2024 I had invested about 37 lakhs and its value had become almost 97 lakhs"
Pending
The first 1.25 lakh of long-term capital gains from equity mutual funds are tax-exempt for resident individuals.
"The first 1.25 lakh from equity mutual funds is tax-free for every resident tax individual."
Pending
An estimated saving of 12,500 to 15,000 through tax loss harvesting on 1 lakh capital gains.
"you saved approximately 000%, right, 15000 is also a big amount, significant"
Pending
Implementing tax loss harvesting for multiple family members could result in significant annual tax savings, equivalent to the cost of a two-wheeler.
"If there are five to six such members in your family, then how much have you saved? One lakh rupees, you got a two-wheeler for free."
Pending
The equity market is characterized by continuous swings, rarely settling in the middle.
"The equity market is like a pendulum. It keeps swinging here and there. It will never stay in the middle."
Pending
A 'golden rule' for equity investing suggests remaining inactive 90% of the time.
"The golden rule of equity is 90% of the time, don't do anything."
Pending
During a 10-15% market correction, investors should top up their investments rather than withdraw funds.
"if it reaches 10 or 15, then you top up, but do not withdraw the money."
Pending
March 2020 presented an opportunity to invest 'dry powder' in small-cap funds during the COVID-19 panic, leading to multi-bagger returns.
"March 2020 was an ideal time to use this dry powder when the whole world was panicking due to Covid, so I used the entire dry powder at that time, I invested all the money in small funds and today they have become multi-baggers"
Pending
Popular investment strategies are seldom profitable.
"something which is popular is rarely profitable"
Pending
Wealth creation comes from holding investments long-term rather than frequent buying and selling.
"It's not the things that you buy and sell that make you money. It's the things you hold. Sit quietly."
Pending
Mutual funds offer a tax advantage because taxes are typically paid only upon withdrawal, which is infrequent for long-term investors.
"the advantage of mutual funds very rarely you pay tax because very rarely you touch your money"
Pending
A 12.5% tax is levied on long-term capital gains (held for over one year) from equity funds.
"in equity funds if you withdraw after one year then 125% is charged"
Pending
Investors can sell mutual funds up to a certain tax-free limit annually and repurchase them to realize capital losses for tax benefits.
"you can sell mutual funds worth that amount every year and buy it back."
Pending
For a goal requiring funds within one year, such as buying a car, it is advisable to invest in debt funds or FDs yielding around 7%, avoiding equity or hybrid funds due to risk.
"if you had to buy a car in a single year, then I would have said that Arun, you cannot take the risk, you put this money in a debt fund where you get 7%, make an FD, withdraw it in a year, right, we cannot invest it in equity, we cannot invest it in hybrid either"
Pending
Hybrid funds, offering 9-10% returns and equity-like taxation, provide tax benefits over debt funds where income is taxed at 30%.
"if we invest in hybrid fund where we can get 9-10 and its taxation is like equity, then you get a lot of benefit in taxation, otherwise if you invest in debt fund then your entire income that you have earned, you know what happens, the income gets added and you are taxed on 30%"
Pending
Multi-cap and flexi-cap funds are recommended as the best investment vehicles for do-it-yourself investors lacking deep market understanding.
"multi cap and flexi cap funds are the best vehicle for a DIY investor who does not have this much understanding"
Pending
Investment allocation strategy based on time horizon: debt for less than 3 years, hybrid for 3-5 years, and aggressive equity for over 5 years.
"if it is below 3 years then put it in debt if it is 3 to 5 years then hybrid means if it is above 5 years then aggressive means equity"
Pending
Significant investments in gold, property, and FDs indicate a lower risk profile, as these are perceived as safer assets.
"if you have invested a lot of money in gold, a lot of money in property, a lot of money in FD, then your risk profile is not very high, it is Actually, because when we invest in property or even gold, we think we are playing safe."
Pending
A strategy to top up lump sum investments when the value drops by 5%.
"if the lump sum amount that I have invested falls to 5%, then I will top up further."
Pending
During a 20% market correction, a significant portion (50%) of available funds should be invested in SIPs.
"when there is a correction at 20%, then I will put money at almost 50%"
Pending
Investing in a China fund is considered a high-risk strategy due to market volatility and government interference, but pursued as a contrarian move.
"I'm investing in the China fund, a very high-risk strategy right now. Because of the deep sea or something, no, not deep sea, the Chinese market has been very fluctuating, very fluctuating. There's a lot of government interference, right?"
Pending
Buying assets significantly above fair value relies on the 'greater fool' theory, where future buyers are expected to pay even more.
"Anything has a fair value. Right now, you are buying semiconductors at a price much higher than the fair value, and you think if this trend continues, then even if I am paying overvalued, it will go above that, which means there will be some other greater full, who will buy from you, it is a called greater full,"
Pending
Investors in Microsoft in 2000, despite it being a top company, experienced a 15-16 year period to recover their initial investment due to overvaluation.
"whoever invested money in Microsoft, it took 10 years to recover that money. Microsoft was the best company in 2000. If you have invested your money in Microsoft shares, that time it took some 15-16 years to reach the same stock price."
Pending
The current market situation is characterized by high valuations across most assets, with nothing being particularly cheap.
"Unfortunately, everything is expensive right now, meaning no one is very cheap."
Pending
For a buy-and-hold investor seeking a single mutual fund, the Nifty 500 index fund is recommended.
"If you choose only one mutual fund in your entire life, which one would it be? You are a buy and hold investor, put your money in Nifty 500."
Pending
Nifty 500 index funds are recommended for their low cost and the ability to earn market-equivalent returns without active decision-making.
"in Nifty 500 you do not have to use your brain because it is an index fund, index fund yes and it is low cost also, so at least you are paying less cost and you will earn the same returns as the market"
Pending
Achieving returns above 12% over a 25-30 year period is considered a 'crazy' and exceptional outcome.
"25 30 year period anything about 12 is a crazy, it is a crazy return from Magan House"
Pending
A strategy focusing on average returns over the longest possible duration is preferred for compounding wealth.
"I want to play a game with very average returns, but for the longest duration it is not compounding, it is wild and amazing"
Pending