The Power of Strategic Investing

Imagine you're trying to learn how to drive a car. Sure, you can watch videos online or attend a weekend class, but would you trust yourself to drive safely on a busy highway after just that? Most likely not, because real driving experience requires time, practice, and guidance from someone who knows what they're doing.

The same goes for investing. Many people think they can master the stock market just by watching a few YouTube videos or attending a quick workshop. They believe having access to information on the internet is enough to make smart investment decisions. But here's the reality: real knowledge comes from deep understanding, practice, and learning from the experienced, not just surface-level resources.

If you truly want to grow your wealth and make smart investment choices, you need to go beyond what you think you know and invest in real learning. It's like driving – the more time you spend practicing and learning, the better you get, and the safer and more confident you become.

Mastery in investing doesn’t come from skimming the surface; it comes from diving deep into knowledge and experience.

Let's take an example:

Imagine you have a total net worth of ?1 crore, including cash, property, savings, and other assets. Now, you decide to invest in stocks.

Scenario 1: Small Investment (?5 Lakhs)

You invest ?5 lakhs (5% of your total net worth) in a high-growth stock, and after a year, the stock performs well, giving you a 30% return. This means your ?5 lakhs grows by ?1.5 lakhs, so your total investment is now worth ?6.5 lakhs.

Net Impact on Your Wealth: Your net worth has increased by ?1.5 lakhs, bringing your total net worth to ?1.015 crore. That’s only a 1.5% increase in your overall wealth—not a significant change.

Scenario 2: Large Investment (?70 Lakhs)

Now, let’s say you invest ?70 lakhs (70% of your total net worth) in the same high-growth stock. Again, it grows by 30%, meaning your ?70 lakhs earns ?21 lakhs. Your investment is now worth ?91 lakhs.

Net Impact on Your Wealth: Your total net worth increases by ?21 lakhs, making your new total net worth ?1.21 crore. That’s a 21% increase in your overall wealth—a massive change compared to the first scenario.

Conclusion:

In the first case, a small investment barely impacts your wealth, even with a good return. But in the second case, the larger investment has a dramatic effect. The key takeaway is that you can only make a significant impact on your wealth if you're willing to take calculated risks with a larger portion of your assets.

However, taking such a bold step requires knowledge, experience, and confidence. Just reading about investing or attending a quick weekend workshop isn’t enough. You need to develop real skills over time to make informed decisions and have the courage to invest wisely.

Big changes require bold decisions backed by true knowledge.