Can we build wealth of Rs. 100 Crore in a life time?

Mr. Warren Buffet once remarked “I don’t love money, but I love making money”. Apt to his statement, he created $70 Billion wealth (Rs. 4.2 Lakh Crores) in his life time through stock market investments. So, he loves making money and made it big time. But, he doesn’t love money, so donated almost 85% of his wealth to Melinda Gates foundation.

“Create wealth & become rich before talking philosophy and saying that I don’t love money”. This statement is made by Mr. Buffet and Mr. Shah Rukh Khan (also an acute business man) on different occasions.

Now, if some middle-class person, starting from 0 can build Rs. 4.2 Lakh Crores in a life time, can’t we build wealth of Rs. 100 Crore?? Its possible, without much effort. All it takes is discipline and patience.

Please go through the below table (self-explanatory).

Investment per month

% Increase in monthly investment every year Return on investment No. of years Wealth created

20000

8% 20% 35 Rs. 139 Crore
20000 8% 18% 35

Rs. 89 Crore

20000

8% 15% 35 Rs. 47 Crore

15000

8% 20% 35 Rs. 104 Crore
15000 8% 18% 35

Rs. 67 Crore

15000 8% 15% 35

Rs. 35 Crore

10000

8% 20% 35

Rs. 70 Crore

10000

8% 18% 35

Rs. 45 Crore

10000 8% 15% 35

Rs. 24 Crore

If you can start investing Rs. 15000 per month and increase the monthly investment by 8% every year (salary increases @ 8 – 10% on average p.a) and if the investment grows @ 20% p.a, then you can create a wealth of Rs. 104 Crore in 35 years.

The reason I took 35 years is as follows:

           a)    Most of us start working at the age of 22 and work upto 60 years, in total 38 years. I took 35 years on the conservative side.

Your salary increases @ 8 – 10% on average p.a, so it should not be a big problem to increase your monthly investment by 8% every year.

Now, the most important thing is, which financial product gives return of 20% p.a? The following mutual funds schemes have given returns to the tune of 20-24%  p.a since their launch and they have a consistent long-term track record.

Scheme name

1 year returns 3 year returns 5 year returns  10  year returns

Returns since  launch

ICICI Prudential Value Discovery Fund

17.3%

29% 17.3% 20.3%

24.5%

UTI Midcap Fund

21.5%

34.4% 18.2% 17.2%

21%

Birla Sunlife MNC Fund

44%

33.3% 22.2% 22%

19.5%

Franklin India Prima Fund

22.8%

30.6% 17% 16.2%

21.2%

SBI Magnum Mid-cap fund

27.2%

34.8% 18.2% 16.6%

18.5%

HDFC Mid-Cap Opportunities Fund

21.1%

29% 18%

17.5%

Religare Invesco Mid N Small Cap fund

20.4%

30% 17.4%

18.2%

Mutual funds are a good way to invest in shares of good businesses (companies). We can’t start our own businesses (which is a dream for many of us) due to some reasons, but we can invest in businesses by buying their shares through mutual funds and become part owners of the businesses. Isn’t it good? We don’t start business, we don’t run business, but we are entitled to the profits of the businesses by being shareholders and see our share prices growing over time.

Its very clear from the above discussion that it is not difficult to build wealth of Rs. 100 Crore in a life time. I am repeating again; all it takes is discipline and patience.

So, stop procrastinating & start your wealth creation today, there is no better day than today for doing a good thing.

If you are not a Crorepati, atleast let your child be one.

I am on the wealth creation path and want to take along many others with me….you are welcome to post any suggestions or doubts.

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