5 Important Charts that you must understand to make WEALTH




A Picture is worth thousand words. So today I thought to share few charts that are really important for you to understand. Let me share one more thing that most of the charts that you find on TFL are out of my own research. And sometime it not takes hours but few days to make them. Hope you will appreciate them by giving your few minutes.

Long term investment chart – this is 30 years data of various investments & it compares them with few expenses. We can clearly see that in long term equity is a clear winner – difference is so huge that it can’t be ignored.

Related Article:
What is Equity? Understand its right meaning to reap the benefit

 

Negative Debt Returns Chart: Debt creates an illusion of safety but in long term safety is preservation of purchasing power. But here debt products fail. Most of the time debt products give negative return – if we consider inflation & tax.

Related Article:
Why Fixed Deposits & Debt Returns will always give negative returns

 

Chart why people lose money in equity – I always keep saying that Investing is not a number game but a mind game. There will always be a big gap between Investor returns & Investment Returns. And this graph clearly shows how greed & fear rule our mind. It shows that when market start rising people pore more money & vice versa.

Related Article:
Behave Yourself… Financially

 

Chart Magic of SIP – Systematic Investment Plan(SIP) has become a buzz word now a days but I am sure people still don’t understand it in a real sense. SIP is a great tool which can help you in achieving your financial goals. For some, last 3 years were the worst part of their investment life but for SIP investors it was not less a dream that came true. Chart Shows market moved in a semi circle & investor made 27% CAGR return.

Related Articles
Systematic Investment Plan(SIP) – Complete Guide
Do you really understand SIP

 

India Growth Story Chart – You will never have a faith in equity if you will not try to understand relation between stock markets & growth of economy. Stock Market is barometer of economic growth. If you don’t believe that India will grow & become a bigger economy in coming years, better you should not invest in equity markets. This graph is part of famous BRIC report by Goldman sach that says India will be 3rd largest economy around 2030.

Related Article
India will rule the world

 

Invest in Equity and you will reap the benefits of Indian growth story. In the last 30 years, India’s GDP has grown close to 6% and now we are nearing 9-10% GDP growth target.

Also Check: 5 Funny Investment & Insurance Cartoons

Mandhupam added a comment – which gives better direction to this article. 🙂

Simplest explanation to the 5 basic questions, which bother an investor. And these are:
1) Where to invest? (India)
2) Which asset to invest? (Equity)
3) How to invest? (SIP)
4) What minimum return to aim? (Alteast above inflation)
5) When to invest? (Always, with no timing)

Must share your views & ideas on charts – I may try to build few out of them.

Print Friendly

Subscribe for TFL Weekly Guide

Do you believe in - An apple a day keeps the doctor away? Similarly, TFL Guide is your weekly apple, keeping you financially fit. Subscribe now and get Basics of Financial Planning E-Course FREE.

{ 40 comments… add one }
  • madhupam March 22, 2011, 10:01 AM

    Dear Hemant,

    A great analysis by you. I can clearly see the simplest explanation to the 5 basic questions, which bother an investor. And these are:
    1) Where to invest? (India)
    2) Which asset to invest? (Equity)
    3) How to invest? (SIP)
    4) What minimum return to aim? (Alteast above inflation)
    5) When to invest? (Always, with no timing)

    Very intersting and something like Gulzar’s poetry, which has simple words but have a deep meaning.

    • Hemant Beniwal March 23, 2011, 5:49 AM

      Thanks Madhupam,

      Added your comment in the post.

      • subhash bhusari March 23, 2011, 6:49 PM

        i want to know about the wealth story of financial market of India from 2006 to 2011 please sent the same sir. thanks a lot

        • Hemant Beniwal March 24, 2011, 1:00 PM

          Thanks for suggestion – I will try. But you wrote something similar – which you can read by downloading e-book from top of this page.

  • Dhawal Sharma March 22, 2011, 10:07 AM

    Excellent Article and great analysis..Your hardwork really shows HEMANT regarding your research and projections..Only thing i find missing is returns from REAL ESTATE over this period..Please include that part also in the article..

    Dhawal Sharma

    • Hemant Beniwal March 23, 2011, 5:51 AM

      Hi Dhawal,

      Very limited data is available on Real Estate & that too is not reliable but still will try to add something in coming days.

  • Ranjan March 22, 2011, 10:37 AM

    Awesome post. Thanks.

    The SIP return of 27% is a real example? Can you please point me to the data source behind the calculations?

    Thanks,

  • Anil Kumar March 22, 2011, 10:43 AM

    Visited many websites regarding financial guidance and learning. So far you are leading. Great job. Keep it up. Teach us something about currency trading as well.

  • Vishal March 22, 2011, 12:48 PM

    Excellent article, SIP calculation and Indian Growth Story are very strong example of why you should invest in Indian Market, and SIP comes handy in your investments, as it offers you multiple benefits like compounding the value of your money.

  • Shinoj Jose March 22, 2011, 1:40 PM

    Very good article Hemant. Keep up the good work.

    • Hemant Beniwal March 23, 2011, 6:14 AM

      Thanks Shinoj,

      This is all bcoz of TFL readers – who keep me motivated. 🙂

  • Manshu March 22, 2011, 8:00 PM

    This is pretty cool – very well presented and of course your research shows in the work itself.

    I was most amazed by the data about stock returns and inflows. Does the inflow data include MF and FII purchases as well or is it just retail?

    Great job!

  • tinku shaw March 23, 2011, 2:17 PM

    dear Hemant jee,
    thanks to guid me how to invest.plz suggest me top 10 sip fund to invest.is there any web site to know update knowledge of mutual fund?

  • Mahesh March 23, 2011, 8:07 PM

    Very good article on stock market return. Iwant to know all SIP (equity fund) is eligible for Section 80C?

    Thanks

  • Vijay March 31, 2011, 1:36 PM

    Hi Hemant,

    U have doing xlent job ,by giving this kind on information and this encourage us to keep invest in good instruments to make good earnings in long term…..
    U r on top….gr8 job..

  • Nikita June 5, 2011, 12:31 PM

    Hi Hemant,
    I am regular follower of this website 🙂 and its got a high quality , simple and detailed content. Great effort and keep posting more for yout readers \m/

  • Debashis Basu June 5, 2011, 5:48 PM

    Hi Hemant,

    Sensex was launched in 1986
    http://www.bseindia.com/about/abindices/preface.asp
    Which index are you referring to in the chart1 and what is the source. Would be most obliged if you can enligten

  • Debashis Basu June 6, 2011, 9:18 AM

    Hemant,

    I have seen that data at different places. It is probably wrong.

    We all know, equity is great over the long run. But this data shows that from 100 “Sensex” went to 1000 in 10 years. 10 times in 10 years? You are very well read. Can you honestly believe this and trust this data?

    The fact is, India has very poor system of data collection and maintenance. Ask yourself, why does BSE give Sensex data from 1990 and not from 1986 or from 1979-80 if this data is correct and robust.

    We have been engaged in trying to create database of Sensex and earlier data of RBI time series. Neither BSE nor RBI have it/share it.

  • Chinmay Jhaveri June 7, 2011, 12:27 AM

    Dear Hemant,
    I have heard this days a lot about Private Equity Invesment .
    can you share some article / its Returns or write ups how good or bad is private equity and how to approach it
    Regards
    Chinmay

  • ANIL KUMAR KAPILA July 18, 2011, 5:11 PM

    Hi Hemant
    I liked the following points :
    Debt creates an illusion of safety but in long term safety is preservation of purchasing power.
    There will always be a big gap between Investor returns & Investment Returns.

  • Hema August 23, 2011, 12:32 PM

    thanks for all the articles Hemant. I am taking my own time in going through the articles..better late than never..you make complex topics seem so simple. Keep up the good work.

  • Sunitha December 27, 2011, 3:03 PM

    Hi Hemanth,

    Excellent work.Your way of presentation is so simple that even a layman can understand, and so detailed to get enough information.

  • AJAY BEDI March 5, 2012, 9:17 AM

    A good indeed. Thanks Hemant for the details. I am a strong beleiver of investing in Equity-Debt mix in approporiate proportions. It will be good if you can provide the readers with some scientific tools which help them to calculate right proportions of investment as per their age and earning potential.

  • Ankush More August 5, 2012, 12:58 PM

    Dear Sir,

    I am weekly reading your TFL guide course very excellent sir.
    Sir my one question.
    My firend lic agent he saying you invest in LIC jeevan anand plan monthly 2000 for 21 year but pls.suggest to me Where i do invest acutal your i am very cunfuse LIC good OR equity market my future
    Because my monthly salary is 8000
    Pls.help me sir.

  • param January 30, 2013, 1:23 AM

    Nice article

  • brijendra kushwaha July 14, 2013, 11:54 PM

    It is an excelent article to understand that how SIP works and why we should invest through the SIP

  • Ravi December 16, 2016, 9:02 PM

    I want to spend money pls guidens me

  • John January 8, 2017, 10:54 AM

    You completed certain fine points there. I did a search on the topic and found a good number of folks
    will go along with with your blog.

Leave a Comment