Current value of Rs. 10 Lakhs invested in September 1986 (30 years ago) By Dr. Bobby Srinivasan and Dr. Sudhakar Balachandran

September 21, 2016 | Posted by bobbysrinivasan << back to blog

It is always good to go back and look how well we have been managing our wealth. We save for a host of reasons especially to meet financial obligations after our retirement. Needless to say that inflation eats away significant portion of the purchasing power of the money that we saved. So one of the important objectives of long term wealth management is to come out ahead financially and become self-reliant. Bearing this in mind I designed a course titled Long term Wealth Management and listed it as a possible course that should be taken to achieve the above stated objective. Guess what? Only 22 out of 400 students opted for this course and hence rightfully cancelled. As a Professor of Finance, I found this both bemusing and intriguing. A question came into my mind as how students select their courses. Another question arose which is, Did the students know what they are missing? Luckily I found an article (file attached) in the Times of India (September 20, 2016) which gave me facts and figures that justified creating such a course. I repeat the content of the article for the benefit of readers.

Question: Where should one invest his / her hard earned money? The table below will give the comparative value of wealth over the 30 year period starting September 1986.

Money deposited in savings account – Rs. 32.4 Lakh

Money invested in gold – Rs. 1.54 Crore

Money invested in Bank Fixed Deposit – Rs. 1.74 Crore

Public Provident Fund – Rs. 1.58 Crore

Inflation – Rs. 1.00 Crore

Sensex index – Rs. 4.88 Crore

Diversified equity fund – Rs. 8.58 Crore

Some observations are relevant here,

By putting money in the savings account, you will have become bankrupt. Your 100 Rs. deposited would have become 32.4 Rs. after 30 years. Do you know that more than 30% of our savings is in savings account?
You would have beaten the inflation handsomely, if you had invested in Sensex stocks and or equity fund.

Now let me revert my attention to the basic question. Why students did not want to take this course.

If the students are still interested, GLIM is planning to offer executive education of a 2-3 day duration offering this course in due course of time. Try to enroll and learn. You cannot afford not to have this knowledge about wealth creation. It should make you queasy when you learn that the foreign institutional investors have made huge profits in our Indian market and continue to do so. I am also adding a small note on 10 books of investing for your reference

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