Big Players always make the big money in any business they venture. Now the question arises how do small players create big wealth ? Courtesy – Indian Equities. Data suggests that a a 10 year SIP in Mutual Funds has yielded around 30% returns. So your [1000 / month saving] 120,000 has grown to about 600,000 in 10 years. Now if you switch them to Dividend option, you can easily get at least Rs 30,000 [worst case] as dividend income every year. Reported Dividend income is about 60,000.
Now compare this to investment in real estate. First, for a paltry sum of Rs 1,000 / month you had no investment opportunity. On top of it you have the headache of managing the property atleast few times a year, corporation taxes, dealing with shady people and the endless list goes on.
Indian Equity Fund Yield Vs Real Estate Returns
- SIP of Rs 10,000 / Month for 10 years would make you worthy of Rs 60,00,000 – Same amount invested in property would be valued at Rs 60,00,000 [We are giving realty bulls the benefit of doubt. Assuming they invested in Land.] Ok, now if you have had bought an apartment for 12,00,000 the value would be lesser than Rs 60 Lakh.
- Yearly Yield on Equity Investment from 11th Year – Rs 4,00,000 Lakh [conservatively] Reported dividend pay-out Rs 6,00,000
- Yearly Yield on your property [Nil, since investment is in Land or Rs 25,000 Max if it is an apartment, still less than the conservative dividend you earn from Equity]
The facts are in front of you. And since you are our reader, we believe that you are disciplined enough to create big wealth in the next 10-15 years by sticking to Equity Mutual Funds. Read our next post on Why Lumpsum Investments in Equity Funds Now and how to Make your money grow 10 times in 12-15 years.