In my role here, I meet many clients – with different income levels, goals, risk appetite, investing style, etc. However, my goal and end objective while talking to them are same – I want maximum people to walk on the path of wealth creation while helping them achieve their goals.
This involves helping them build an alternate source of income through the right investments that meet their goals and risk appetite.
Creating an alternate source of income gives you financial freedom and let me tell you financial freedom isn’t all about buying luxury cars, or big bungalows or taking exotic vacations. It is all about the freedom to do what we like without worrying about money.
This is not possible if we have only one source of income which is our monthly salary. And it is evident because, after all, that is what pays for our day to day needs. And even if we manage to save some, there’s always a risk of getting fired from the job.
That’s why it is essential to create an additional source of income while in the job.
Let me share a real-life example of my neighbor Mr. Vaidya who is a travel freak and has travelled to over 50 countries across the world. Every couple of months, he takes a short vacation. Not just domestic but international ones too, by combining his weekend holidays with public holidays or casual leaves.
I admire his penchant for travel and at the same time used to wonder how he managed to fund his frequent travel plans considering he is just a bank employee.
One day over casual talks, he told me how he was an old school investor by buying blue-chip stocks right from the day he started his job at the bank in the year 2000.
“I hold over 15 large-cap stocks in my portfolio like L&T, TCS, Wipro and Infosys, many have multiplied in quantity thanks to bonus shares I received over the years,” he told me.
This explains quite clearly how Mr. Vaidya is a patient investor, and in spite of being in a regular bank job, he can fund his passion for travel. He started investing in the year 2000. Which means over the years, even an initial purchase of 100 stocks would have multiplied in quantity.
Assuming he had purchased 100 stocks of L&T in the year 2000, today he would be holding a much larger quantity of stocks as L&T has issued bonus shares 4 times in the ratio of 1:1 (twice) and 1:2 (twice). Similarly, if he had purchased 100 shares of Infosys in the year 2000, it would have multiplied by numerous times considering the multiple number of times bonus shares have been issued by the company in last 19 years. And the icing on the cake is the yearly dividends which he must be receiving.
This was just an example of two stocks in his portfolio. As he holds over 15 stocks in his portfolio, that too all blue-chip stocks which are good dividend payers, one can imagine the pipeline of wealth he has built over the years.
It is said that money cannot buy happiness in life. But yes it can definitely buy a lot of things which can make us happy.
The need for money is why most of us go to work every day. But in spite of that, the truth is that there is never really enough of it. So how do we get that extra bit of money that we’re always craving for?
The answer is simply by building an alternate source of income while in your regular job just like Mr. Vaidya. There are many options to invest for creating an alternate source of income like investing in bank deposits, real estate and dividend-paying stocks. But not all are that great.
Bank deposits offer meager returns these days in the range of 6-7% and considering the falling interest rates in future, it may even fall below 5%. Besides, if you factor in the inflation, the real rate of returns are even lower.
Investment in real estate for rental income used to be a good idea, but not anymore. While the property rates have touched the sky, the yearly rental amount which you receive is just 4-5% of the property value. Apart from there are other costs involved such brokerage, charges for registration of the rental agreement, maintenance costs and non-occupancy expenses payable to society. All these have made rental income unattractive over the last few years.
Investing in good quality businesses is one of the best ways to create wealth while being in your regular job. As compared to 72.93% returns generated by Nifty over the last 5 years, R&R’s 5 in 5 Wealth Creation Strategy has generated a return of 400.53%. This is the power of quality businesses when invested for a long-term!
Now that you know it is possible to create wealth while still being in your regular job, all I want to tell you is that if haven’t done anything about it till date, this is the best time to start.
Trust me this something that your future self will thank you for.
Start investing now for a better tomorrow!
Read more: How Long-term investing helps create life-changing wealth – TOI.