Droplet Wealth

 2023-2024 is very interesting period and for a very unusual reason. The reason being a lot of flagship funds of some very famous Asset Management companies completed or crossed 20 Years. Considering the fact that we always tell - Equities should only be considered as a Long Term investment tool, 20+ years truly signifies "Long Term". Before we move on, here is an sample marketing material that is circulated widely to show the growth of the capital invested - One thing that caught our eyes was - How the material shows today's value in Crores. Largely it is due to aspriations of today's generation wanting to be crorepathis and rightly so.  But for a common man, the question is always how much investment has to be made to reach that "Crore" Mark. The materials we presented above talks about 1 lac becoming 2 Crore in 26 years. Given how our mind works, we quickly jump to a conclusion that we just need to invest 1 lac and we will get 2 Crores years later

                         If you know, its that simple and yet do not do it, It feels bad. A lot of this is so true for life and all the more in financial life where people think that one has to jump hoops after hoops, do some very complex thing like Options Trading, invest in Crypto, NFT or have "contacts" that can make you rich over night while each of us know that consistently saving is more than enough to make you wealthy beyond your imaginations! One such simple tool that helps you save consitently is your humble SIP. Yet people doubt its abiltity to create wealth and complicate things with "What will happen If" questions.                           We decided to write about How SIP creates wealth even if the asset price does not go "much" above the Price you did your 1st investment through your favourite asset- "Gold" A Chart showing the same -  As you can see, the price of gold for 7 years did not move much. From INR3100 in 2012

 Couple of weeks back, Microsoft backed Open AI came with its latest version of the AI Tool - ChatGPT-4o. Everyone's already excited about how this AI tool is going to make their work and life more easy and efficient. Given the context, It got us thinking  - Are there automation tools that help us create more wealth ? That will make our investing more efficient ? That will make our life more easy. Can AI /Automation help us finally discover the holy grail that will make us super-duper rich?    Like all comman men, we saw if it can help us find the best mutual fund? or find that exciting Option Strategy ? or give a formula that can help me find next Infosys, Reliance or HDFC Bank? or help me do Algoritham trading that has made crores of rupees for Institutional investors? or heck can it atleast help me buy a "Winnable lottery ticket?  We realized that they may or may not give us the answers we seek but for assure none of these guarantee success.  Then common sense dawned, the a

     Anecdote - We recently we met a client and pitched the 1 Crore plan. He was quite happy and agreed to start the investment journey with us. A few days later he sent me a insta-story about how somebody can make 15 crores and asked me – Why I pitched “Only 1 Crore” when we can make 15 crores! We have always been wary about YouTube shorts and Insta stories which give a false notion it is very easy to make money in stock markets and become super duper rich. Our suspicion is that the only motive of these social media posts is to entice people and dupe them of their hard-earned money. Confirming our suspicion, we recently came across scam which used should social media to reach a lot of well-educated, literate people and cheated them.   Here's what happened… Madhav had already invested Rs 30 lakh through an app called KKR MF, which he had been led to believe was managed by the global financial services group. Mind you, Madhav is not a simpleton, but an intelligent, accomplished

 Continuing with series of understanding Why Investing is Easy , We thought to bring our own example to the table. This is true story of a Share that we bought when we were just newbies.  We bought a stock at INR 240 and It went to INR 2700 .  Thats a neat 11X gain. Meaning 1 lac invested is worth 11 lacs now and 10 lacs Invested is worth just a above one crore at 1.1 crore.. Fanstastic! One can see Investing is so "easy" , you just have to buy a stock and wait for it to go up. Oh Wait! We just realised we did not tell you how long we waited to make 10 times money we invested.  We bought a stock at INR 240 and It went to INR 2700 in 8 years Now it makes more sense, we just need to buy a stock and wait for 8 years to make 10X. T hat works to a return of ~31% yearly compounded. So we said wow what if we can compound at this rate for another 2 years? We have anyways waited for 8 years.. 2 more years wont hurt! Magic..  In Just 2 more years, we will have 2 Crores! So we decide to

                                 Ok time for Chapter#2. A quick recap on what we saw in Chapter#1, that a monthly investment started in Jan 2019 in an Equity Mutual fund could have given a return of 19% -23% P.a. or a Lumpsum investment made on the same day would have doubled by now.. Yet not many invested. Lets try and answer that through this blog.                      When we invest, the only thing we look for is "Returns" and here is the return profile of the Investment started in Jan 2018.  An investment of 3000 monthly that is 36,000 for the year will have a ending of value of only ~36,000 with absolutly no growth and in one case,  The current value is lesser than our invested value, Alas!  now tell who will have the courage to invest in Jan 2019 ? Remember the ad - Investment are subject to Market Risks.." That would have played on our minds on loop.  Next lets go back a little more and see how the investment started in 2016 would have fared -  So on a total inves