Investment News / This is the real power of investment, this is how 10,000 rupees became 8 lakhs

Investment News: Investing is an art in which patience is the greatest virtue. If you are on the path of investment, then it is important to understand that this is not a short-term game. It demands a commitment of decades, not a matter of months or a few years. Those who adopt this long-term approach can get multifold returns on their investments. A living example of this is the investment of Rs 10,100 made in ICICI Prudential Mutual Fund's Equity Linked Savings Scheme (ELSS) in 1999, which has become Rs 7.98 lakh today.

The mistake of timing the market

It often happens in the world of investment that investors get disappointed when the returns are not as per expectations. This disappointment pushes them into trying to know the "market timing". Timing the market means buying or selling a stock or security by estimating its possible rise or fall in price. However, this strategy can be risky, as it is almost impossible to accurately predict the market movement. Instead, staying invested for a long time and tolerating market volatility may prove to be more beneficial.

The story of becoming a millionaire from Rs 10,100

This topic has recently garnered a lot of discussion on the social media platform X. Piramal Finance Managing Director Jairam Sridharan shared an inspiring post on LinkedIn, in which he told about his investment journey. Sridharan decided to invest soon after starting a job in 1998. In 1999, he invested Rs 10,100 in ICICI Prudential ELSS Tax Saver Growth Scheme. After 25 years, this investment turned into Rs 7,90,457.8. This achievement not only shows the power of patience, but also shows how big a difference the right investment option can make.

Returns much higher than the stock market

Sridharan's investment achieved a compound annual growth rate (CAGR) of 19.05%, which equates to a total return of 7,726%. In comparison, the CAGR of Sensex was 12.15% and that of Nifty 50 was 12.48% during the same period. Both these indices gave returns of almost 2,500%. This difference makes it clear that a well-chosen mutual fund scheme, such as ELSS, can not only outperform market indices but also provide additional benefits such as tax savings.

Importance of investing in emerging markets

Emerging markets, such as India, are known for rapid growth. The major indices have seen significant growth over the last 25 years. But it is clear from Sridharan's story that it is important to stay in the market for the long term to make the most of this growth. Investment options such as ELSS not only help in tax savings but are also a great way to take advantage of the growth of equity markets.