Build a BIG PORTFOLIO (2Cr+) even with less salary | Investing Strategies

hi everyone welcome to today's video so in today's video I am going to help you understand how to invest your salary in the stock market now if you are sitting on a salary of 25 000 then your investing style might differ drastically compared to a person who makes like more than one lakh rupee a month so what investing style should you adopt as per different salary levels I'm going to help you understand in very simple easy to understand language more importantly I am going to help you understand how you can generate real wealth and how much real wealth can you generate at each salary levels if you follow this investment plan now before jumping into the core of the video please understand that irrespective of your salary level risk mitigation is extremely critical and important now one way of hedging your risk is to buy insurance which brings us to the sponsors of today's video which is ditto insurance they are a wonderful platform for buying insurance I have personally purchased my insurance from ditto insurance and you could consider doing the same they do free consultation spam free calling and also help you in terms of claim settlement they are also looking to hire people in their advisory team so do check out links in the description and comment box in case you are interested in this opportunity so with that said let's move over to the main video so okay so let's Jump Right In And before discussing each salary level let me first and foremost discuss a very interesting case study about Mr nikhil kamak so Mr nickel kamath is the co-founder of zeruda and this is how he invests his money now when this data was released in the market many people started commenting that you know what Mr nickel kamath is the owner of xeroda and it's a big Equity investment platform he has a lot of data on Equity investors and he himself is investing how much money in equities he is only investing 50 percent of his money in equities forty percent of debt that means fixed deposit so he has done like fixed deposit so much and government wants and gold only two percent and real estate five percent so does it make sense that person who deals in the equity stock market almost every single day he is investing only 50 percent of his wealth in equity market so why is it that people like you and me should invest more money in the equity Market this is a very important question so let me help you understand that it will drive a very important Point home that investing is a very personalized subject so here is my understanding of why Mr nikhil kamath is investing only 50 of his money in equities why not more so there are two Central reasons so first and foremost his Core Business is what his Core Business is so when what zirodas profits go up well zeruda's profit would go up when the equity Market is running because when the equity Market runs a lot of investors jump in they start doing fno they start doing trading they start doing investing bus tutorial so let us just invest invest invest so when will zeruda make money well when the equity Market goes up now if Mr nickel kamath is investing his money in equities and if a situation comes when the profits of zeruda starts going and also his wealth in the market starts going down so it might become a problematic scenario for him so so basically because his Core Business which is zeroda has a direct correlation to stocks so what he needs to do is that he needs to create an inversion there is a direct correlation between zirodha and equities but in terms of zirodha and debt there is an inverse relationship so investing less money in equity is a risk mitigation strategy for him it's not as if that he does not believe in equity so that is my understanding second key point is that as your portfolio grows from like a small portfolio to a bigger portfolio to a really big portfolio your goal also changes for example if you're sitting on a massive portfolio right then a part of it needs to be protected so wealth protection becomes a very critical goal for almost any investor especially when you are sitting on a huge portfolio so these are two Central points why I think that Mr nikhil kamath invests only 50 of his money in equities I hope you would agree with this Viewpoint and also please press the like button so that these type of videos reach out to more people I teach stuff in a highly conceptual Manner and that's it I also give you logic rationale behind it of course you can agree disagree with me also I know that you haven't pressed the like button so please press it and we will continue the video and now let me start discussing four salary points or four salary levels as to how you should be investing your money so the first salary level might be a salary range of 25 30k this might be happening if you are in the middle of your career or if you have just started your career so you might not be getting paid a lot now if your salary Falls below 25k should you think more about investing yes you can apply some of the principles that I'm talking in the video but the first part that I'm going to discuss is how to invest a salary of 25 to 35k now the first point is that many of you would think that 25 35k is a very low salary level I will not be able to make any savings only so why even bother about investing now of course that can happen depending on your expenses level I can't comment on that but to a general investor I would always recommend that please save 10 to 20 percent of your salary I am a big proponent of frugal living so I will work with the assumption that you are able to save 20 of your salary that becomes your discretionary level of income that you can invest again if your salary is less than 25k now many comments might come that my salary is five thousand ten thousand then don't worry at some stage it is going to increase then come back to this video and apply this plan it's okay so Point number one is that I will assume that you will be able to save 20 of your salary at 25k levels now 20 of 25 000 is 5000 rupees so that becomes your investable level now again please don't complicate the video by bringing a taxation this that okay I'm trying to simplify the video not complicate the video for you so let's work with the assumption that at 25k level you will be able to invest 5000 rupees salary now our goal at 25k level easily becomes especially when you are starting out in the stock market is to grow your portfolio at a kagger of 13 now how to achieve that 13 gains I will talk about it in a minute many of you would say yes so please take a look that I am sitting on a big portfolio that if I can get 14 15 Returns on my mutual funds stocks so I can definitely tell you that by adopting the following investing style you will be able to make 13 returns so you are investing 5000 Rupees at a kagger of 13 for a period of 30 years because you might be young you might be 25 30 years old making 25k so at least 60 years of age you will be investing your money so how much is the total Corpus so the total Corpus comes out to be 2.21 CR okay so this is the eventual money that you will have now many of you might say yeah 2.21 CR is what I will get after 30 years so what is the value of that money that I will have now inflation will eat into that money 100 agree but see what happens is that for example if this year your salary is 25 000 probably next year there will be an increment it will be thirty thousand then year after that there will be another increment it might become 35 000 so I am assuming in this model that your increase in salary will offset inflation so this 2.21 CR is the real wealth that you can generate with a salary level of 25 000 as of today so okay if you are at a salary range of 25 000 to 35 000 then basically the Target that we are assuming is 13 14 return Manalo then you will be sitting on a healthy portfolio now here what is the primary goal that you have well your primary goal first and foremost Is wealth preservation in the stock market this is a critical goal for you why because majority of your time right now when you are at 25 35 000 salary range should be to actually increase your active income so rather than spending crazy amount of time understanding which stocks to buy which stocks not to buy the strategy that you should follow in the stock market is that you make 13 14 returns that is very doable that is sensible for you plus invest the time in terms of doing your Prime primary job if you are a software engineer if you are a digital marketer whatever that job is increase your salary level that is your primary goal right now your primary goal is not to make crazy returns from the stock market so how you can make 13 14 returns for this I will tell you three very simple points first and foremost please learn how to do index investing now there are different different types of indexes for example there is nifty 50 Index right which is the collection of top 50 stocks there is something called as itbs right so this is the collection of it stocks similarly there is a PSU Bank index similarly there is Nifty bank so when you go and invest in index what ends up happening is that it is very unlikely please notice the word unlikely it is very very unlikely that you are going to lose your money why because these are some of the most stable assets so to say for example if you buy nifty 50 or itb's SS audio or gate will get crushed by like 50 60 all of a sudden that can happen in a beer run when some kind of major crisis happens like covert 2008 so leaving those exceptions aside in general circumstances index investing is considered to be one of the safest form of investing in the stock market please notice the word safest form of investing in the stock market otherwise now comes the more important and interesting question here is that should we invest our salary in whatever index we see the short answer is no it's not as if that nifty 50 you just continue to invest whatever levels no right now for example take a look at this chart this shows that nifty 50 right now is at its record levels now if you go and invest your money right now in nifty 50 should you be doing it in a lot especially in bulk the answer is no on the flip side if you pick Nifty it it is trading roughly 25 30 discount should you pick that index the short answer is yes so this is the first critical point that you should understand that invest in index but primarily pick indexes that are somewhat undervalued then comes the second key question that you should go ahead and invest in a large cap stocks now what are large cap stocks these are blue chip stocks HDFC Bank Bajaj Finance this that okay now here what happens now again these companies have clean management there is no major problem going on now as long as you are getting these large cap stocks at a discount you should go ahead and buy it no problem there so for example take a look at HDFC bank right now HDFC bank is it overvalued undervalued by uh you will not be able to analyze it whether it is overvalued or undervalued but you can run like basic understanding for example if you learn economics finance stock markets from my videos every day hardly 20 minutes of investment every single day you will understand all these techniques for example this is a channel trading technique right I had applied this on nifty 50 right bought Nifty fifteen bulk at 15 500 levels applied it in Hindustan University Applied it in a bunch of stocks and now I'm sitting on handsome profits now from that perspective HD FC Bank we know that it is a fundamentally good stocks right and one could argue that if you take a look at from a long term Channel perspective why are we picking long term because see right now when you're at 25 35 000 salary level what is the goal the goal is to increase your salary first you don't have time to you know keep rotating your portfolio this that but yes if I make a video you get to see here you know what it is like somewhat of an undervalued level let's understand is rational so the rational that he's giving is that okay from a long term perspective if you take a look 2018 up until now this is the channel That HDFC bank has followed and it has broken this channel as of now so this was discounted here definitely and here also it is discounted then one could argue that it is discounted no it's not as if that you just need to trust me and buy the stocks do your due diligence after this but at least I'm explaining you some Funda some logic there I'm not just you know doing this undervalued yeah this is overvalued no I'm giving you some logic there similarly there has been so much noise made on D Mart D Mart is not going to stay alive only like after five years because it missed analyst expectation on results so it's not like that right so whenever you see certain stocks trading outside its Channel if you understand it that okay this is a large cap a blue chip type of a company yes there is an understanding why it is trading at a discount you should buy these large cap stocks so the first two points are that buy index at a discount buy large caps at a discount so this way you will be able to generate an above average Market return just say for example if Nifty is growing at 12 which it typically grows at 12 percent then you might be able to make 13 okay now comes the final bit that when it comes to volatile assets for example I have been saying for a while now that small caps and midi caps your stock say they are going to outperform the market why is that because studies tell us that during a bull run if the Nifty Grows by 100 points then small caps grow by 200 points right so that is what history tells us now of course this is not as if that is 100 we followed but the chances are that volatile assets volatile assets means slightly risky assets so small cap mid caps are riskier than large gaps so these assets should also be added on your portfolio so very quickly let's say that you have to invest 1 lakh rupee in the stock market and if your salary range is 25 35 000 rupees then how much of it should go to index versus large cap versus volatile then I would give like 80 wealth preservation and 20 growth right so 20 growth will come from here this volatile bit and 80 wealth reservation depends on opportunities that are there in the market so if you just simply follow this strategy then this is a low risk strategy it allows you to grow your wealth also and also you don't need to sit and keep tracking markets every single day please note the final point that when I say that you don't need to invest crazy amount of time in the stock market I mean that it's not as if a computer pay right so I mean that is not the point but you will still have to do basic research you still have to understand where your money is going you have to develop that Financial Acumen so I hope this first level is clear to everyone and by following this simple strategy you will be able to make 13 14 kagger if you take a three to five year Horizon now let's discuss the second salary level which is between 50 000 to 75 000 you might be like around 30 you might be making this amount of money again you get a good 30-year investment period so we'll assume again that you will at least be able able to save 20 25 of the money so the worst case that we are looking here is that if we are assuming a salary of sixty thousand and if we pick twenty percent of it so twelve thousand per day so here if you are investing 12 000 Rupees at a expected return of 13 for a period of 30 years then your total Corpus becomes 5.3 CR as of today now why am I saying as of today simply because of the Viewpoint that again I assume that if you're 30 making a salary of 60 000 then your salary will grow at least at inflation level right so therefore I am not accounting for inflation here so I hope that point is clear now I can create very complicated Financial models it does not work so doing muta Mota math will drive the point home okay so if you are in this salary range there are three additional critical points that you should remember additional because three additional points you should remember so first and foremost is let's see you are playing with good amount of money if you are investing 12 15 000 rupees a month or if that is the capacity at which you can invest they then you should definitely take advantage of bulk investing opportunities now what are bulk investing opportunities for example right now I see a bulk investing opportunity in Nifty it I see another bulk investing opportunity in HDFC bank I see another bulk investing opportunity in something like SBI cards I see another bulk opportunity in something like page Industries so I will link one of my videos down you can go and check it where I have discussed all these talks so if you are at this salary range of 50 75k then you are putting enough amount of money in the stock market additionally your emergency expenses might be sorted out you might be okay in terms of investing your money in a slightly longer term perspective so let's say that if you are getting a good safe Assets Now if you are buying Nifty ID right now it is trading at a 25 discount now it might happen that it goes sideways for a little bit right but is Nifty it a high risk asset no high risk means what that for example if starting tomorrow tomorrow Nifty corrects by 10 percent do you see Nifty it correcting by 10 more right I doubt it simply because it is already available at a 25 discount but Nifty is already at its all-time high so therefore this is a lower risk asset which is available at a discount opportunity I and if you have some cash lying around you can take advantage of this bulk buying opportunities by taking advantage of bulk buying opportunities is how you generate an additional Alpha what is the meaning of additional Alpha well historically speaking nifty 50 gives a kagger of roughly 12 percent but if you are able to grow your portfolio at 16 that's additional four percentage so do the math here if 25 000 rupee is invested monthly in the stock market for a period of 30 years at 12 percent it comes out to be roughly eight point something's year right but if the only number that changes on that math is 16 return your portfolio become 22.x CR so yes it looks only four percent difference but that is the difference between wealthy and ultra wealthy rates it's almost three times your portfolio so you should definitely work a little bit smarter in terms of generating the solar percent returns now how will you generate the 16 return well by doing some amount of bulk investing on safe assets from time to time now the second critical point that you should remember is that you should generate some cash flow Assets Now what are cash flows assets so one would be dividend stocks because this money gets back to you right so you will get some more money to invest so this is one second key point is that you go outside the equity asset class for example it could be debt it could be real estate if you are finding some good deals so it gives you reliable cash flows for example you know that you are going to get FD money at the end of the year or you know that is coming out to be like 20 25 000 from a flat value of purchase so the point is is that once you own these cash flow assets taking advantage of these bulk buying opportunity becomes much easier so please focus on that third and finally is that you need to add a little bit more risk on your portfolio at this stage here according to me your goal should be to grow your portfolio and one of the fastest way of growing your portfolio is to take more sensible risk for example in the previous section when I was discussing 25 35 000 range salary I said that go 80 20 on safe versus volatile asset here it should be 75-25 of your Equity investment now if you are fairly young then you can play around with this number it could be like 60 40 or whatever you choose to decide whatever that Comfort level is But please understand the point that as you add more units of risk on your portfolio it becomes critical for you to have a slightly longer Horizon on your portfolio now please don't say that Alex said I purchase like small gaps and then it fell by like 10 very small gaps scan Fall by 10 15 20 very quickly right so please don't get stressed by all that and the only reason why you will not get stressed by all this is that if you have a little bit of horizon yeah I do not need the money so therefore I'm cool with it so if that Viewpoint is there then good enough then this is an investment plan that will work for you wonderfully well it's okay so if you are making a salary of more than one lakh rupee and if you are investing somewhere around let's say 25 000 rupees monthly then I think you are already at that very good investing level and here you need to understand a few more critical points so before discussing those two three critical points let's do the fun exercise and let's see how much money you can make so if you are making 1 lakh or P plus so let's assume that you are doing a monthly investment of 25k you can grow your portfolio by 15 how I will talk about it in a minute and 30 years if you see then you are sitting on a portfolio of 17.5 CR so this is a fairly substantial portfolio so what are additional points that you should remember in addition to section one section 2 that I spoke about so there are three more critical points that you should remember so at one lakh plus level you need to segment your portfolio for example this is your portfolio now create different different segments out of it for example one segment of your portfolio could be retirement planning portfolio now what is the meaning of retirement planning that for example if you are investing let's say 25 000 then you are probably investing let's say 8 000 per month for your retirement plan right so what type of stocks should you purchase for retirement so these should be fairly large gap stable stocks yeah index investing are low so all that stuff makes what it caters to your retirement planning right so this is not for growth growth this is for stability this is for preserving your wealth in a way also you can go to bond investing so have a little bit of diversification but why should you do Bond investing given the current climate well you should do Bond investing in the current climate for retirement planning bonds right he will not be able able to preserve your actual wealth also so bond is okay in terms of preserving your wealth up to a certain limit but inflation adjusted return you will not get so this is point one point two is that you need to diversify internationally also you are putting in good amount of money so at this stage start thinking about that I will put 20 of my money that I am investing in equities into U.S stocks now why is it critical that you have international diversification well it matters from a wide range of reasons right now I can have that concentrated portfolio versus Diversified portfolio debate see the world is getting more and more volatile it is given that economic shifts are happening countries are moving away from US dollar there will be a lot of pain involved you need to be a diversified investor if you're coming from my school of thought so I'm a highly Diversified investor I always encourage Diversified investing the thing there is very simple let's see as retail investors we don't know what the internality of things are for example you guys go and read like Anvil reports you guys go and read like con calls companies right half the accounts are like you know for example take a look at by juice take a look at like bunch of other listed companies also there is no transparency Clarity right similarly a lot of people are saying that you know what India's GDP is growing at five percent do you know how much of that is fiscally deficit sponsored so India itself is running a fiscal deficit of five years all these small small points are there which you might miss so I'm not saying that this is good or bad all I'm simply telling you is let's see being Diversified is a very critical issue you must understand it so from that respect it is critical that you do International diversification also I will at least recommend that you get started with 20 over time I would diversify 40 of my portfolio outside India not because I do not trust the India growth story I am very much 60 I'll be invested in India so I do trust the Indian growth story but at my portfolio size I need to be highly Diversified on that note the final point is that you must have a real estate investment also so at this stage 1 lakh plus income level is a good enough income level where you can start thinking about purchasing real estate it gives you what it gives you asset class diversification as a class means stocking asset class okay similarly real estate becomes an asset class the biggest problem in real estate is that it is an illiquid asset illiquid means that it is not very easy to sell off but the point is that by this stage your stock portfolio would already get built so from that perspective you can afford that illiquidity so to say many people say here real estate the problem is that people do not know how to buy real estate there is a post that I've done on LinkedIn I will link it in the description and comment box you can go and read it almost every single property that I have purchased it's a cash flow property and making a rental yield of more than five percent so it's not as if that you don't make money from Real Estate you just have to scout for good deals so I hope you enjoy this conversation it was a slightly deeper conversation also check out this video if you are investing in mutual funds then this video you will give you clarity as to how to design your mutual fund portfolio thank you so much for watching and I'll see you soon

Channel: Akshat Shrivastava

Views: 1,343,283

Keywords: akshat shrivastava, cases over coffee, wisdom hatch, wisdom hatch courses, stock market courses, akshat shrivastava courses, stock analysis, investing for beginners, how to invest, how to invest in the stock market, large cap stocks, small cap stocks, index investing, nifty 50, it bees, stock market for beginners, invest your salary, equity to debt ratio, nikhil kamath investing portfolio

Id: L837QfEf1Nc

Length: 24min 29sec (1469 seconds)

Published: Mon Jul 17 2023