Granted, achieving financial independence is not a cakewalk, but you also don't need to go through fire to get there. And if Basant Maheshwari, the well-known investor and author of “The Thoughtful Investor” is to be believed, all it takes is an aggressive, consistent approach and baby steps.
In response to a tweet asking how retail investors, who possess very limited monetary resources to allot to investing can achieve financial independence before 40 years, the ace investor advised playing your innings the T20 way- full of risks, fire, and power!
“I achieved it well before reaching 40. Started small, kept adding cash, and had/ have only one asset class. Being financially free requires a lot of risk-taking. It's like a T-20 game. You can’t reach your target playing forward defence.”
Maheshwari, who is credited with identifying several multi-bagger stocks like Pantaloon Retail, Page Industries, Titan Industries and more, founded the Equity Desk, a popular online investment portal. His videos on equity-only approaches towards investing and long-term wealth generation are extremely popular as well, with more than 9k subscribers.
The equity formula
The idea is simple - high risks to get high returns. The investor focuses only on investing in equity, choosing not to invest in traditionally safe and low-return generating asset classes like debt, gold, Fixed Deposits (FD), and more. Investing in proven winners and market leaders which have a track record of delivering substantial returns on equity and high sales turnover is a sure-shot way to build wealth in the long run.
And solid equity performance in recent times only confirms his belief in this most volatile of asset classes. Take a look at the growth of some major stock indices around the world over the last 5 years:
| Index | Returns (5-year, in percent) |
| BSE Sensex | 87.76 |
| NSE Nifty | 83.4 |
| S&P 500 | 102.13 |
| Dow Jones | 88.32 |
By focussing on long-term objectives instead of quick returns, investors can win big. But, according to him, stock markets are not to be seen as a vehicle for regular income generation. On the other hand, gold and FDs are simply for capital protection.
But perhaps the biggest investment he advises we should make is that in ourselves. Reading, learning, and understanding the stock market as much as you can is the key to ultimate success, in life and stock markets.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
