Ask yourself one very important question:

  1. Are you happy with what you are doing or are you a slave?

the definition of a sudra was a person who was always told what to do..or he was like a slave. Consider this – if you have a lifestyle you do not like (I am moving from a house with 8 lights and 2 night lamps to a house with about 58 LED lights thanks to the ‘interior’ expert), have a Suv, a foreign vacation – all to prove to the external world, bought with an EMI, you have to be a slave right?

You have bought all this with money you do not have. To be repaid with a salary from a job that you do not like, settle your children, worry about retirement, pay for parental medical expenses, …..

hey where is your life? you are a slave too.

Yes you wear a sacred threat, tell your shlokas, know your vedas – but still the EMI is the boss. You can leave your IBM job and work for Coke or leave your KPMG job and work in PWC…but still the boss is the EMI.

Can you think of leaving your job? to start something new? to work in an NGO? to….live your dreams? Sorry not available to a slave.

So can you sell your house in Khar for Rs. 4 crores and move to Kharghar where you can get a 3 bhk for Rs. 1.5 crores?

What about putting Rs. 2 crores in an equity fund? Omg Subra you are mad…is that so?

Here find a mad clone…

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  1. Subra, we go through lot of selective bias. Equity investing is lot glorified. I would like to see successful example other than your case who retired at 39 thru equity investing inspired by blogs such as yours. Most of your readers including me are reading your blog for the last 5 years and never once you have written some success story with ordinary guys making big through small capital.

    I want to see the absolute numbers. Not 1000 invested became 2000. Rather, an example of selling the house and got into the market and generated positive return of 25% for next 5 years. You may be aware, NIFTY INDEX gave negative returns in the last 6 yrs. For me, facts on the ground matters and rest all is theory and we can construe anything in this theoretical models.

    As much as you feel like wearing burkha for influencing someone to sell the home (taboo in society), you should also take moral responsibility because the person had taken extreme step kind of cult following. While you are in the forefront to take the credit should some positive happen, it should not be disclaimer should the result goes other way.

  2. @Balaji,

    Even the Noorish article (Tech guy) which subra’s article based on also suggested to put house sale proceeds in FDs and systematically enter into equities. I did not assume anything. Do you know others who congratulated for your bravery but then you responded to them supportively. When I questioned, you point out that we hardly know each other. We only pick things that we want and gets offended if questioned or does not agree.

  3. @Krish – first of all.. let me clarify I was not offended nor intend any offense.. πŸ™‚

    “Why could you not save any extra amount to invest in equity in all 8 years?” – are you not assuming I didn’t save any extra amount to invest in equity?

    “I would have preferred to see my performance with equities with small savings before taking this big decision of selling the house to get into equities” – are you not assuming I have no experience in equities?

    “If equity market crashes, lot of families might leave suicide note on your name blaming for the debacle.” – are you not assuming am not prepared for equity market crashes?

    If these are not assumptions, then probably I misunderstood you and apologize for that!


  4. @ Balaji,

    I want to highlight one famous quote “We don’t see things as they are; we see them as we are”.

    Pls go through above carefully. One is a question and other is my personal choice. Again no assumption on your behalf. Third one is not intended at you.

    We want to know the full story behind such big decisions and invariably a lot of questions would arise on public forum because someone did unthinkable to many. In business, they call innovation, new product, new markets and what not. You did some thing similar and naturally curiosity arose.

    If you are uncomfortable to divulge more information, we are fine with it. But do not take those questions as criticism.

  5. @Krish I don’t think it will do anyone good to prolong the argument… lets call truce! πŸ™‚

    Here are the answers to your questions,
    Do you feel this upfront capital is important for equity investment?
    Yes, its about how best you could utilize your resources(capital).

    Do you have an experience in equity investment before?
    Yes, I have been investing in equity MFs and direct stocks for about 10 years.

    How confident are you that you would generate positive real return?

    Why could you not save any extra amount to invest in equity in all 8 years?
    Am afraid.. this is not a valid question!

    Some more details if that would help..
    By the time I closed the loan the outstanding principal was not much(about 30% of the original loan amount) as I had periodically made bulk payments. All along I had also invested in equity MFs. I had been as frugal as I could and saved as much as I could. Part of my savings was used to prepay the loan and the rest invested into equity MFs. My goal is to become financially independent(my definition – not having to work for the sake of income) as early as possible. I believe this decision will help me become financially independent at least about 10 years earlier.

    P.S. – I had moved out of my house to a rented place for the sake of my son’s schooling 3 years earlier. That’s another story equally interesting!!

  6. at the end of the day we should all be able to sleep peacefully without any worries and be happy

    if selling house or putting 50 lakhs in share market makes you snore peacefully then do it

    there are no absolute rights or wrongs what worked for you may not work for me.

  7. @lakshminarasimman – that’s true.. however one should at least try overcome few biases if that’s going to help improve ones life in some way!

  8. balaji,
    as long as i am happy i really do not care if have biases or what others think as me doing wrong..that is the same thing you also did right?

    problem is people should not behave like america telling everyone their own way is the only right way.

    if subra is happy staying in retirement village all alone he is right
    if i am happy putting all my retirement money in statebank fixed deposit i am also right

    there is no point telling right way is your children should take care of you or share market is better than fd.

  9. @lakshminarasimman – Say.. there is a person who is comfortable only to keep all his money in cash locked in a safe at home.. doesn’t even want to put the money in FDs in banks because he fears there is a chance that the bank could go bankrupt (not improbable… we had Lehman.. isn’t it?). only this way he can sleep peacefully at night..

    will he not do good to himself if he makes some effort to know the facts, learn about risk/reward, probability and over come the fear?

  10. @ Balaji– Congrats for taking a reasoned decision based on facts rather than gut feel

    @ Krish – I am one of the guys that you are looking for . I have heavily saved and invested in equities and equity mutual funds over the past decade. I have a mixed track record with my direct equities but been much more successful with MFs. According to all retirement calculators and tools that I have run , I can confidently say that I can retire when I wish to without saving another penny.

    Caveats : Obviously , with such a story. I am married , with no kids yet. I have yet to save for their education . I do not need to save for a home because I am inheriting one. My parents are independent and I did not have any education loans , job losses ( touch wood) or sister’s marriage expenses or sibling’s educational expenses. I earn a reasonable salary and spend a little bit on travel and other fun things.

    Point Im making is , I have witnessed the power of equities in my life first hand. And with my guidance , in my father’s portfolio as well. I have achieved a CAGR of 20% in my equity portfolio over the past decade. Did I make mistakes ? A ton. But since I started from my very first salary , the time periods involved forgave me a lot of stupid mistakes and grave sins.

    I’m uncomfortable discussing exact figures on a public forum. If you give me your email id , I would be glad to correspond with you and share those figures. If not , I shall share mine and we can go on from there

  11. @Nishanth good to know… equity is a boon to people who can’t do their own business… if you look around its so obvious… who are the people who are rich? It’s the businessmen and investors and not the salaried who only do fixed income investments.

  12. @ Balaji – Completely agree with your statement. What puzzles me is how people sailvate and crib over how rich businessmen are , yet keep all their money in land and apartments and gold and FDs , and stubbornly refuse to own a piece of publicly- listed businesses which can help get them get wealthy in a not insignificant way

  13. @ Balaji and Nishanth. Congrats to both of you. Each of your story is really unique and inspiring. Really glad to know that someone exist in real who made good returns in equity through disciplined investing with small monthly investment over a long period.

  14. @ Balaji, congratulations!! I like thought process you outlined in your posts. Though future is not predictable, you have laid strong foundation for success. My best wishes to you.

  15. @Krish

    Let me tell you first that am a full time equity guy and am biased.

    Before jumping into equities you expect someone to do small savings and see performance why not the same about real estate buy a bathroom first ?

    Also you mention real estate giving inflation returns. In the past it has given much better returns then inflation. Does it imply it will give same returns for eternity ?

    I dont know whether equities will give a great or even positive return and in the same way cannot make an assumption about Real Estate which people buy on leverage ( loan ).

    Also rental yields are 2-2.5%. Renting is not that tough nowadays as it used to be. I stay on rent with my parents even though me and them both have flats. Its for comfort πŸ™‚ and convenience. ( even that is difficult to explain to people)

    Am just worried about the assumption that Real Estate will give better than inflation.
    At the same time in Equity even a Positive return is questioned:)

    But all said and done nobody expects a negative return on Real Estate not even temporarily.

    So its a call one needs to take personally with an open and a bit of financial reasoning too.

    Am only worried about the leverage part in Real Estate πŸ™‚ – Loans. What if incomes drop how will you pay EMI for 20 years and during the same time the Real Estate is in a down cycle.

    To each his own. Find an asset allocation which allows you to sleep well and lets your money grow too.



  16. @ Nooresh, I liked what you have suggested in your article. Let me share bit of my story who attempted to implement your current suggestion 15 years ago when chips were down.

    I had one prime property which I wanted to sell to get rid of EMIs, losses from bad investments and hand loans to get breathing space and decent life. Distrust grown up with family & friends that they were suspecting fishy of everything that I do due to bad history. No one would see any merit in correcting past mistakes or faith in you that you would set the house in order.

    As such I did not say that particular asset was superior or generated positive returns. Kudos to anyone who generates real returns through investment in any asset class for long term.

    When I mean small investment, you have taken it as bathroom in RE. What I meant was 1 BHK/small plot in suburb instead of a premium 3 BHK or a Villa from top builder as status symbol.

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