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Learnings from the prospective client

Today I was talking to a prospective client, He is about to retire in a couple of years, accumulated 2.6 crores in equity mutual funds and 42lacs in PPF. He has been investing in mutual funds from last 15 to 20 years and his average return is about 15% CAGR

Lessons to learn from the above discussion

Common questions everybody asks me

  • Which fund will give the highest and best return
  • Why you suggested me *** rating fund instead of ***** rating fund
  • Why my friend investment gave high returns than mine
  • Why I shouldn’t invest directly in stocks when my friends are earning good money from stocks….. and so on

Well, my answer to these folks is:

Accumulation of money is important than CAGR as long as CAGR is above inflation levels over long-term

Nobody in this world can tell which fund/investment can give the highest top returns for next 15 to 20yrs… And if anyone assures you about the highest and best returns… It is nothing but he is trying to FOOL You.

You cannot judge how others influence you with simple psychological tricks, which makes us tricky and commit to what others say within short time and only to repent later that what we did is a costliest mistake – To know more about how others influence, please listen to Psychology of Human Misjudgement by Charlie Munger audio that I keep sharing very often

One has to do is be realistic in expectations and aim for 2 to 4% real returns over inflation. Determination, Dedication, patience and adequately investing regularly irrespective of where the market is going the next day, next month, next year, next decade will make one achieve his/her goals.

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