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Shwetabh Gangwar is WRONG

Authors

Overview

My video

Shwetabh’s video


This blog will only make sense if you have watched my video. So go watch that first.

Why Shwetabh is wrong and why Investment is important

His advice is so bad because he is completely ignoring 5 factors

1. You dont need to spend much time to invest

You genuinely do not need to spend much time if you want to invest. Yes, you can spend as much time as you want to select the best, the most undervalued stocks that will give u the best returns, but you don't have to.

You can opt for mutual funds, ETFs, and even smallcase is an excellent option if you have a lot of money because you have control over your investment style.

You can set automatic sips in all three, which doesn't really take any time.

2. Compounding is really powerful

Compounding is a word that everyone uses these days, and it's highly overused, but there is a good reason for it. Like there is no smoke without fire, the effects of compounding cannot be ignored.

It is so powerful because it grows your money exponentially.

Like if you invest just 1000 at a return rate of 15% and put in no more money.

  • after 5 years, you will have 2k, which means it doubled after 5 years
  • after 10 years, you will have 4k. Thats 4 times
  • after 15, you will have 8k. thats 8 times
  • after 20 years, you will have 16k. that's 16X, and that's just starting. Compound interest has just started to show its power.

For compound interest, the time which matters is the last period, like if you invest for 30 years you will get the most retun in 30th year

In 20 years, it just gave a 16X return, but if you wait 10 more years, the total return is 66X, which is enormous

returnsreturns

BUT WHO HAS 30 YEARS xdddd

No one, xddd that's why Shwetabh's advice to work hard for a skill is a bit of excellent advice. But that doesn't mean you don't invest because the more time you give, the more you earn. Also, we still have 3 more factors to talk about 😉

At this point, I may be losing your interest. You might think that 30 years is a lot, which it is, but I was talking about investing 1k just one time. Imagine if you do that every month. The amount you will have after just 10 years will be a lot.

returns

Exactly this much. So just don't put 1k once and forget; instead, do it regularly. Also, calculator's link if you want to see how powerfull compounding is. https://groww.in/calculators/sip-calculator

Also, a fantastic video about this whole thing which will give you 10x clarity

 

3. Inflation is real and is very bad for you

What is inflation?

In straightforward terms, it means at what % things are getting expensive or at what % a currency is losing its value.

Now you may think, how can a currency lose its value.

That is very complicated, and I am very lazy to type all that. Still, a TLDR is that it works using supply and demand. I can go into great detail about US DOLLARS, INR, and other currencies, but that's for another day.

You just need to understand that everything gets expensive by some % every year, and that's inflation.

So if things get expensive every year, but your money remains the same, you are losing money.

That's why you need to invest.

In India, inflation is around 6 to 7 % every year. Therefore, you need to grow your money at a higher return than 6/7%

And that's why people hate FDS because at the moment, they are not giving ROI > 6%

Some articles to read -

Explained: What Is Inflation And How It Is Calculated

What Is Inflation?

CPI inflation rises to 8-month high of 6.07% in February 2022

4. Investing is also a habit

This is explained very well by Vedant Rusty in this video, so I won't be going into detail. It is also a very nice tldr I would highly recommend watching this

 

5. It's also a skill that you have to develop through experience

Stock markets are very, very volatile, which means they go up and down every time. So a good investor needs to have a mindset well-adjusted to that volatility. Else, they will end up losing a lot of money.

Real investors must keep their emotions out of investments. This comes only after real experiences. It is next to impossible to predict if the market will go up or down. The typical human emotions of fear and greed can push the investor to opt for later regretted decisions. When the market falls, it might prompt you to take out your money in fear of lower prices. If you have invested in good assets, you do not have to worry about market falls.

How to start investing

I can predict that many people want to know how to start investing after watching. Although neither the video nor this blog is financial advice, and I would recommend you do your own research, a good starting point is starting a sip in index funds or large-cap mutual funds. If you can take a bit more risk, Flexi cap mutual funds like Parag Parikh Flexi Cap Fund are a great starting point, too (they are pretty risky tho)

Parag Parikh Flexi Cap Fund scheme is only suitable for

ocean

Also, they invest in foreign stocks

Which app/broker should I use

If u want to start investing, you can use Groww or Upstox

Groww is really good for beginners and very easy to use, whereas upstox is a bit advanced, but it provides more features.

You can also use Zerodha, which is the best, but I still recommend groww for beginners.

If you want to invest using any of these brokers, it would be great if you use these links as it will give me a little money 😛

Groww

Upstox

Zerodha

also a video to help u understand all of this (skip the intro btw)

 

What is SIP

A Systematic Investment Plan or SIP is literally nothing. Its just an easy way to invest money in mutual funds. SIP allows you to invest a fixed amount at a regular interval (weekly, monthly, quarterly, etc.)

SIP works on the principle of regular investments. It is like your recurring deposit, where you put in a small amount every month. It allows you to invest in a Mutual fund by making smaller periodic investments (monthly or quarterly) in place of heavy one-time investments, i.e. SIP will enable you to pay 10 periodic investments of Rs 500 each in place of a one-time investment of Rs 5,000 in a Mutual fund.

You can invest a sum as low as Rs. 100 per month in a mutual fund scheme if they invest through the SIP route.

If you start a SIP, sum of money gets debited from your bank account and invested in a mutual fund. In return for the amount invested by you, you get mutual fund units depending on their value on that day.

Why Systematic Investment Plan is the preferred mode of Investment

  • First, SIP is a disciplined way of investing:— A disciplined approach to Investment helps us achieve our goals, i.e. in case we want to build wealth over the long term. For example, a monthly SIP of 5000 would become close to 4.3 crores in 25 years if the investments grow at 20% per annum.

  • You need not worry about markets falling.

How sip is useful even for small amounts

Again for this ill recommend this video

 

Few videos I recommend


Learn more about investing

This blog already as gone on for too long so I will just tell you few things so you can explore more yourself

  • opportunity fund
  • emergency fund
  • asset classes
  • learn about stocks (CA Rachana , pranjal kamra good source)
  • equity mutual funds, debt mutual funds
• Discuss on Twitter