Revealed: Here Are the 4 Reasons Why the Rich Are Getting Richer
One Sunday evening, 15-year-old Mohit was taking a stroll with his father. While crossing the city road, he noticed a beggar near the traffic signal, alas, he did not have many coins in his begging bowl. The distraught situation of the beggar got Mohit submerged into thoughtful and mournful thoughts. But his noble thoughts were soon interrupted by a blaring voice of the car honk. As his attention shifted towards the car, the fancy and exorbitant look of the car stupefied him. “Magnificent! This car would have cost him crores,” Mohit contemplated. And at the spur of that moment, a question “Why the rich are so rich” took its birth in his inquisitive mind. He raised his concern to his father.
“Dad, what makes these people so rich and what is the reason behind a huge disparity in the distribution of wealth in our country?” asked the innocent Mohit.
DID YOU KNOW?
- A recent study shows that only 10% population of India hold 76.3% of the country's wealth.
- The total market value of the top 10 richest people in India is a staggering $129.8 Billion.
- Investors in the Indian stock market is around 8.1% of the entire population as per the SEBI Investor Survey Report 2015. This number is minuscule as compared to the USA where 43% population is investing in the equities.
His father replied, “Son, the answer lies in the investing habits. Most of the Indians fail to realize that equity investments have consistently outperformed other asset classes & it can create significant wealth in the long term. Risk-averse investors have maintained a safe distance from this asset class. But they cannot be completely blamed for it. Lack of expertise and knowledge among the investment fund managers, adds to the existing apprehension in the air.”
Curious Mohit probed more. He enquired, “Dad, how many investors are participating in the Indian stock market?”
“Out of the meagre 7.5% population that has invested, at least 25% are now inactive and another 25% feel it’s not the right time to invest in equities. These people have already burnt their fingers trying to follow tips, rumours and in greed of making quick money through short-term trading. The remaining half, come under the list of top 10% of the India’s richest people. Almost all of them created their wealth by investing in stocks.”
“Even I want to create wealth when I grow old. But, how can I generate wealth through equity investments?”
“Listen to me carefully. You remember, last year you wanted to learn piano and we got highly experienced and credible piano teacher to give you the best piano lesson. Similarly, we have investment experts who are highly skilled to find out the companies to which can create significant wealth in the long term. Their job is to study the fundamentals of a company and on the basis of their stock research reports, they advise to invest for long term. The rich people allow their investment experts to manage their investments,” answered his father.
Here are 4 things that distinguishes the ‘RICH’ from the ‘REST’
1. They don’t fall for the gimmicks which shouts “Get rich overnight”
The rich are aware about the fact that wealth creation is a gradual process. They never look for quick fixes in a desire to get rich within a short span of time. Fast upward trend of wealth can take a nose dive any moment. They do not let their emotions play a part in buying or selling stocks and they are only interested in well researched companies that has a strong potential to generate robust return for them.
2. They believe in just three words! Diversify, Diversify, Diversify
The rich will never put all their eggs in one basket. They diversify their portfolio by investing in stocks, bonds, various-cap equities, specialty asset classes like real estate and natural resources to create the most diversified portfolio possible.
3. Don’t worry, Be happy
They treat ‘Panic’ situations as an ‘Opportunity’. Historically, studies have proven that the rich invest heavily when the markets are down. When the markets recovers, their investments provide mind boggling returns. However, many fail to realize is that any sector that is facing a lull will eventually recover and grow again.
4. Invest in Fundamentally Strong (and Socially responsible) companies
They majorly invest only after conducting the fundamental analysis of the stocks. They tend to invest in companies that are both sustainable and socially responsible. Today, the real value of a company is the amalgamation of its goodwill and historical performance. Remember the only trick that works is: “Hold what you have invested and for as long as the company is fundamentally strong.”
The father asked Mohit, “Do you wish to learn more and join the bandwagon of wealthy people? If yes, then you should see the brand new approach that Research and Ranking have to offer. They have a team of highly qualified researchers who advise on best wealth creation strategies. Based on the investors’ profile, they provide personalized stock portfolio for long term investments. The recommended stocks generate the returns of 4-5 times in the interval of 5 years. They also monitor these stocks and advise on portfolio rebalancing.”
“I am already on my way to schedule my visit with R&R,” said Mohit.
Mohit is coming to meet us. Why don’t you join us with Mohit and we can show you how to get rich...