So many people tell me (OMG and I politely nod) …here is what I wish to tell them:

Subra, I made money….

a. buy getting ESOPs in my company

b. buy buying a house for Rs. 30 lakhs, now it is worth Rs. 90 lakhs and only Rs. 12 lakhs of the loan is to be repaid.

c. I am investing in Gold for the long term

d. I invested Rs. 70,000 in PPF for the past 15 years and it has grown to….

Let us look at some of them:

You make money when you invest in a good company. If you were lucky to have got a job in Hdfc, Infosys, etc. yes you got ESOPs. Yes you made money by HOLDING on to the ESOP, and yes it has appreciated. Look at the facts:

a. You were lucky / deserved a job in H, I or Wipro.

b. You got the ESOP, you TOOK them (you did it just  because everybody did it)

c. You have still kept it (presumably). I know employees of Hdfc who did not believe that Hdfc bank was a good bank. They sold a lot of their shares as soon as the bank listed – at Rs. 40. This was the entry point for many of us, apart from IPO and the 200 shares that we got for being shareholders of the parent company.

To generalise you got a good share, you invested at good prices, and kept it for a long time.

Now suppose when a company is issuing ESOP and you buy the shares of that company, YOU WILL ALSO make money (without getting the esop).

Best way to make money is:

Create a good portfolio

invest regularly and in small amounts

hold for a long time – while removing the weeds regularly

Esop or otherwise will not matter.

In real estate FIRST learn how to calculate COSTS.

Total cost of a house = Down payment (adjust it for inflation over say 10 years) + emi * no. of months that you paid + other costs (let us say figure ‘A’)

Subtract the SELLING PRICE and reduce this ‘A’ from the sale price. THAT IS THE PROFIT. Please recalculate your profit.

You do not understand the risk that you took in Real Estate:

• You were lucky enough to buy in a good locality
• You had the papers to be eligible for a loan
• You did not fall ill, or get a divorce, lose your job, ….etc. AND therefore you could pay the EMI.
• Your builder did not turn out to be a fraud, and gave you good title and possession in the promised time

So yes, you invested (got lucky) had an increasing income, surety of income, had an emergency fund (or did not have any emergency)…celebrate THAT. Investment doing well was the bloody luck part.