1. A secondary source of income:
Investing in stocks helps in creating asecondary source of Income. You can be an employee and an investor at the same time.
2. Make money when you are free at home:
Even if you are on holiday, you canmake your money work for you. The stock market remains open from 9:15 AM to 3:30 PM- Monday to Friday, whether you are working or on a holiday.
3. Stocks have performed consistently as compared to other investment options:
Historically, stocks have consistentlyoutperformed most of the other investment optionslike FD, savings, bonds, golds, etc in the long term.
4. Beat inflation:
It can help youbeat Inflation. The way you get the returns in stocks it will definitely help you overcome inflation or recession.
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5. Power of Compounding:
Stock investing is based on thepower of compounding- the secret of creating wealth. The longer you remain invested, the more wealth you will create.
Royal Enfield Bullet bike used to sell around rupees 55,000 in the year 2001. During the same time, the share price of Eicher motors which are used in Royal Enfield bikes was trading at 17.50.
6. You Don't Have to Be a Brainiac:
A seasoned investor might have an advantage over you as you're getting started, but you don't have to be a math whiz, rich, or another Warren Buffett to invest in the stock market. Investing includes researching the companies you're considering investing in (e.g., reading their annual reports, which you can often find by poking around their websites).
7. Invest in Stocks Because Money Sitting in Cash Will Lose Its Value
Inflation can vary over time and I’m not going to get into too much detail here. But just remember this:When your money is sitting in cash it is steadily eroding in value.
8. Invest in Stocks to Save for Retirement:
If you start investing when you’re young, you canbuild a tremendous amount of wealth for when you’re older.
9. Invest in Stocks for Diversification of Your Income:
Let’s pretend you have a full-time job, rent out an extra room in your house to a college student, occasionally do handy work on the weekends, and invest in dividend stocks.
If any one of those sources of income were to dry up (for example, you lost your full-time job or you hurt your back and couldn’t do handy work), you wouldn’t totally lose your income.Because you have some diversity of income, the extra room rental and dividend stocks could help carry you through a rough patch.
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10. Invest in Stocks to Learn:
Investing in stocks will teach you a ton!
You’ll learn a lot about the stock market, and how companies work, what makes them succeed or fail, how products come to market, how economies impact companies, and much more.
Example of some successful investments:
- If anyone would have bought the shares of Eicher motors instead of buying Royal Enfield bike, he/she would have ended up buying 3143 shares. The share price of Eicher motors on April 3, 2020, is Rs.13,366. An investmentof 55,000 would have turned into Rs. 4,20,09,338 (3,143*13366). Now, the same person could buy any expensive car or bike.
- If anyone would have invested Rs.9,500 and bought 100 Infosys shares for Rs.95 in the year 1993, he/ she would have made whooping Rs. 6,41,02,400 (1,02,400 shares*626) now.The share price of Infosys as on April 3, 2020, is Rs. 626
- Wipro - Most Successful story of 10k grew to Rs. 500 crores (Stock price and number of shares calculated as on year 2015)
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The year was 1980. Mohammed Anwar Ahmed, a 27-year-old resident of Amalner, in Maharashtra, had Rs 20,000 with him as an inheritance after his father’s death. He thought of investing when he came across a visiting broker from Mumbai, Satish Shah, who had come to acquire shares ofWiprofrom the residents of Amalner.
Shah asked Mohammed to go from door-to-door and acquire as many shares as he could from the residents. He helped and as a parting gift, Shah offered him 100 shares at a face value of Rs 100 each. Mohammed agreed and invested Rs 10,000 of his inheritance and invested the remaining 10k to start a tiny trading outfit.
How his initial investment of Rs.10,000 grew to over Rs.500 crores.
In 1981, the company declared a 1:1 bonus. He now had 200 shares.
In 1985, the company declared 1:1 bonus. He had 400 shares.
In 1986, the company split the share to Rs.10. He thus had 4000 shares.
In 1987, the company declared 1:1 bonus. He hence had 8000 shares.
In 1989, the company announced a 1:1 bonus. Now he had 16,000 shares.
In 1992, the company declared a 1:1 bonus. By now he had 32,000 shares.
In 1995, the company declared a 1:1 bonus. He then had 64,000 shares.
In 1997, the company declared 2:1 bonus. He now held 1,92,000 shares.
In 1999, the company split the share to Rs.2. He now had 9,60,000 shares.
In 2004, the company declared 2:1 bonus. He thus had 28,80,000 shares.
In 2005, the company declared 1:1 bonus. He came to have 57,60,000 shares.
In 2010, the company declared 2:3 bonus. He now had 96,00,000 shares.
The current market price is Rs. 599 per share ( As on year 2015). The shares are valued at Rs. 575 crores.
Hence, his shares are valued at Rs. 599 X 96,00,000 (number of shares) = Rs. 575 crore.
Also, over the last 33 years, he has received dividends of Rs. 118 crores from Wipro.
There are plenty of success stories we have in the Indian stock market which can lead you to invest in the stock market without any doubts. Just patience needed.
