A lot of kids I know have 3-4-5 year old SIPs. Some in the red, some in the black. However even those which are in the black are just marginally in the black.
When they see the statement it does not look good. Not good at all.
What can they do? It is tough. I can assure them things will be well, just hold on….but they are under tremendous pressure.
One of the kids without any parental pressure to withdraw just came and said…’Sir…..should I withdraw’.
I had nothing to say. Just said ‘Give it 5 years in a growth option’ – invest Rs. 1000 a month (continue investing…for 3 more years)…the total amount INVESTED would be Rs. 60,000.
If the sum accumulated is less than that, I WILL BEAR THE DIFFERENCE. She was stunned.
Largely it comes from the confidence of the business / economic cycle. She has chosen a good fund (so the fund manager risk is quite low). Not a very sensible thing to do, and I am not recommending it to anybody…however I have done this in the past for a few known people..and have never had to pay out . Theoretically I could have a liability of Rs. 60,000 – assuming I have said this to about 10 people, the risk is Rs. 600,000….hmmmm will learn to live with that…while praying!
For all those kids who do not have any person giving a guarantee, relax, the markets will recover – the question is when, not whether. To get rich you need to invest in very volatile asset classes also. It is easy to say ‘I will invest only in debt instruments like PPF, ….understand risk”
Getting rich, kids, is difficult, but not impossible…
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