How to become wealthy with just Rs 5 lakhs

Imagine.

No, I am not referring to the song by John Lennon.

But imagine that you have Rs 5 lakhs with you and you are 30.
The date is 28th October 2004.

And suppose one of the following happens to you:

a) Prison

You are thrown in prison for 10 years.
You stay in for 10 years.

Possibly because of the following:

(Source: http://www.funnyjunk.com/funny_pictures/4205323/How+do+you+remember+your+name/)

Or

b) Paralysis

Not sleep paralysis:

Ever had sleep paralysis? That’s some scary shit!

(Source: http://thefunniestpictures.com/2014/04/18/ever-had-sleep-paralysis-thats-some-scary-shit/)

But like:

(Source: http://www.theguardian.com/tv-and-radio/2013/dec/09/stephen-hawking-brief-history-mine-tv-review)

Or

c) Renunciation: You decide to renounce the world and become a holy person. You would be living on alms and doing this to pass time:

(Source: http://www.theguardian.com/commentisfree/2010/aug/27/gap-year-india-glorified-holiday)

Then suddenly.
At the age of 40.
You either are released or regain your abilities or have a change of heart and want to join civilization.

So do you start from scratch?

Since you could be feeling like this:

(Source: http://www.repaydebt.org/e-cards/i-am-having-an-out-of-money-experience)

But what if I say, you would be worth atleast Rs 1 crore 55 lakhs 70 thousand!
And earning an income of Rs 3 lakhs plus just in FY 2014-15

Unbelievable?

This is assuming you would have invested Rs 5 lakhs in ITC on 27th Oct 2004 and held onto them.
Back then the share price opened at Rs 36.27 (adjusted for splits and bonus).
The share split 10:1 and also offered bonus of 2:1 on 21st Sep 2005.
It again offered bonus of 1:1 on 3rd August 2010.

All this by just staying invested in ITC.
You wouldn’t have even had to do a lot of research to know about the company.
ITC touches almost every aspect of one’s life.
Advertises so much that only a most ignorant person wouldn’t be aware of its existence.

This is the magic of compounding and long term investing!

2 Comments

  1. Nice thought! But only if the decision was taken then. How about putting the same 5 lakh today and with a lot of effort, hard and smart work you make 5 crores (PAT) per annum in next 5 years.
    Still it's all about 'taking a decision when it matters '!

  2. Thanks for your comment Gagan!

    You are absolutely right! 🙂

    However, I wanted to show, that sometimes a stable style works better than a portfolio that is churned often.

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