Why stocks will never make you rich?

No, that is not clickbait, as it applies to most people. Stocks will make you rich only if:

> You buy them in good quantity.
> You buy them at the right price.
> You keep checking them from time to time.
> You exit them on time and repurchase good stocks.
> You keep yourself updated with the sector.
> You keep tracking the performance of that company.
> You read news about the Indian economy, global economy, interest rate cycles, oil prices, etc.

Sounds like a lot of work, right? And I have not included the behavioural challenges a typical human being faces. Let me give you a real-life example.

Ramdeo Agarwal, founder and current Joint MD of Motilal Oswal Group, had ~5,00,000 shares of HDFC Bank at ₹40, but he sold them all at ₹55 and made a handsome ₹75,00,000 profit. He thought he would buy again at the right price but never did and still regrets his decision (the current price is ~₹1400).

That is what behavioural challenge means - Even if you buy a good stock at the right price, you will probably sell it when it rises by 15-20%. Imagine if Rakesh Jhunjhunwala had sold Titan at ₹10? He bought it at ₹3-4 and still holds it (via his company) at ₹3500.

What if I say you do not have to do anything mentioned above and can still make loads of money from the stock markets? Sounds insane, but hey, aren’t you aware of Mutual Funds?

Imagine - except for the behavioural aspect, everything mentioned above can be delegated to someone else for a small fee. They will do the dirty work of selecting the stocks, buying them at the right price, holding them, timing the market, reading the news, selling at the right time and much more. You only have to invest your savings with them, sit back and enjoy - the least you can do to become wealthy.

Mutual Funds are a fantastic instrument for wealth creation because you do not have almost anything at all. You only need to give some time once (selecting the right fund manager, right fund, etc) and start investing. The only thing you need to do on a repeated basis is not sell when markets are down but invest more when that happens.

I am not saying that you should not invest in stocks directly, but my point is that if you can do everything mentioned above and still have time left to do your day job (which pays your bills), you should go ahead. Most people cannot do that but try to and end up with either low returns (less than Nifty 50) or losses (that happens most of the time).

In search of quick money, they start playing (that is the right word) with futures and options and lose all their capital. Some people get so addicted that they sell their houses, gold, etc and end up on the streets. These are the same people who share their experiences with others and label the stock market as a gambling machine. You must have encountered at least one uncle who tried to stop you from delving into the stock market (or maybe your father), am I right?

Trust me, it is not a gambling machine at all. All you need are patience, proper guidance (i.e. Wealth Mango) and curiosity to learn, and you will end up with a lot of money. In the next post, I will share how people who invest just ₹5000 per month for 20 years end up with crores of rupees. The idea is simple yet powerful, but most people do not realise it until it is too late.

Till then, enjoy and share this with someone who needs to hear the harsh truth.