Brief Summary
This YouTube video is a master class in fund management by Gajendra Kothari, covering various aspects of investing, wealth creation, and financial planning. It emphasizes behavioral management, cyclical markets, and the power of compounding. Key points include:
- Managing investment behavior is crucial.
- Markets are cyclical, and one should invest counterintuitively.
- Faith in the future and human ingenuity is essential for wealth creation.
- Compounding is a simple yet powerful idea for long-term wealth.
- Diversification preserves wealth, while concentration creates it.
- Self-education and continuous learning are vital for increasing active income.
- Financial planning should prioritize retirement, followed by children's education and home purchase.
- SWP can be used for retirement planning.
Podcast Teaser & Intro
The podcast introduces Gajendra Kothari, a well-known figure in the investment world, to discuss wealth creation and fund management. The episode promises insights into portfolio design, retirement planning using Systematic Withdrawal Plans (SWP), and strategies for navigating market situations similar to Japan's economic stagnation. It also covers sectoral ratings and how to potentially increase returns from 12% to 18%.
Make Money from Market Crash
The discussion begins with the observation that SIP (Systematic Investment Plan) stoppage ratios increased during market downturns but are now decreasing as markets recover. Gajendra emphasizes that investing is 99% behavioral management and only 1% technical skill. He advises thinking counterintuitively, being happy when markets decline because it allows for purchasing at lower rates. He tracks the Nifty 500 index and waits for a 20% correction before making significant investments, using SIPs for automatic timing.
How to Build Wealthy Mindset
Gajendra defines a bear market as a 20% fall from an all-time high and likens market behavior to a pendulum, never static. He stresses that market prices are not always fair value and that markets are cyclical. He introduces the concept of "Mr. Market," a moody entity that offers varying prices. Investors should not let Mr. Market dictate their feelings but should instead use market fluctuations to their advantage, buying more when prices are low. He maintains 80% of his investments in equities for the long term and keeps 20% in cash for aggressive deployment during corrections.
Best Safe Investment of 2025
Gajendra argues against the notion of guaranteed returns, even in traditional instruments like FDs and PPF, as rates are subject to change. He emphasizes that safety comes with inflation risk. He views volatility not as a risk but as an opportunity for wealth creation, comparing it to the enjoyment derived from thrilling theme park rides. He advises having faith in the system and wearing a "seatbelt" by staying invested during market turbulence.
The Power of Compounding
Gajendra illustrates the power of compounding with examples from his own portfolio. He shares how a portfolio worth ₹20 crore in September 2022 grew to ₹57 crore without any additional effort, simply through compounding. He recounts starting with a ₹10,000 SIP in 2010, which grew to ₹1 crore by 2014 and is now worth ₹57 crore. He projects that his portfolio will reach ₹880 crore by age 60, emphasizing the importance of patience and consistent investment.
Should We Invest in FD?
Gajendra clarifies the appropriate use cases for Fixed Deposits (FDs), stating they are suitable for short-term goals (6 months to 3 years). He personally avoids FDs, preferring debt mutual funds for short-term goals due to their liquidity and diversification across multiple banks and financial institutions. He contrasts being a "loaner" versus an "owner," advocating for owning equity in companies rather than lending money to them.
The Secret of Top 1% Investors
Gajendra stresses the importance of concentrated portfolios for wealth creation, citing examples like Walmart and Bill Gates. He explains that while diversification preserves wealth, true wealth comes from focusing on a few good investments. He advises against over-diversification, which can dilute returns. For those without the time or expertise to manage a concentrated portfolio, he recommends choosing a good fund manager with a proven track record.
How to Increase Active Income
Gajendra emphasizes the importance of increasing active income alongside passive investments. He shares his personal journey of growing from a ₹10,000 SIP to a ₹30 lakh SIP by consistently working hard and increasing his income. He highlights the concept of diminishing returns, stating that putting in 85% effort yields 100% results, and putting in 100% effort yields 200% results. He advocates for lifelong learning and continuous self-improvement to maximize earning potential.
Why Self-Education is Important
Gajendra stresses the importance of self-education, stating that what you learn on your own cannot be taken away from you. He recounts his experience of prioritizing real-world learning over theoretical knowledge during his MBA. He emphasizes that employers value hunger and attitude over degrees and certifications. He encourages getting out of comfort zone and making trade-offs to achieve goals.
₹10 Crore Blueprint with ₹25K Salary
Gajendra outlines a blueprint for reaching ₹10 crore with a ₹25,000 salary. He advises saving at least 25-30% of income, especially for those living with family. He suggests investing in courses to improve skills and increase earning potential. He provides a mathematical breakdown, stating that with a ₹14,000 SIP and a 15% annual step-up, reaching ₹10 crore in 25 years is achievable. He emphasizes the importance of dreaming big and having faith in the future.
Why Time Over Timings Wins
Gajendra stresses the impact of delaying investments, illustrating how a one-year delay can result in a ₹52 lakh loss due to missed compounding. He shares his personal experience of starting serious investing at age 30, highlighting the significant wealth he missed out on by delaying. He urges viewers to start investing today, regardless of their current income or age, and to maintain discipline and patience.
Financial Planning for Kids
Gajendra shares the story of his daughter Aditi's investment journey, starting with a ₹10,000 SIP on her fifth day of life. He recounts investing ₹1.5 lakh in her name, which initially decreased in value but eventually grew to ₹1 crore after 12 years. He emphasizes the importance of starting early and staying consistent, even during market downturns.
How Equities Make Billionaires
Gajendra emphasizes that equities are the primary driver of wealth creation, citing examples of entrepreneurs and business owners who became rich through their company's stock. He contrasts this with trading time for money, which has limited potential. He highlights the importance of rebalancing portfolios and taking advantage of opportunities when asset classes are undervalued.
Beginners Guide to Investing
Gajendra advises against putting money in very narrow and specific funds. He recommends multicap funds for most investors, providing exposure to the entire market with flexibility for the fund manager. He stresses that asset allocation is key, and 95% of returns are determined by where money is allocated. He shares his preference for active funds, particularly in small-cap categories, and emphasizes the importance of understanding a fund manager's philosophy.
Should We Buy House or Rent?
Gajendra stresses the importance of having travel plans and not being so rigid about buying a house first.
Marriage Planning Guide
Gajendra advises against spending a lot of money on weddings.
Mutual Funds Investing Guide
Gajendra advises against putting money in very narrow and specific funds. He recommends multicap funds for most investors, providing exposure to the entire market with flexibility for the fund manager. He stresses that asset allocation is key, and 95% of returns are determined by where money is allocated. He shares his preference for active funds, particularly in small-cap categories, and emphasizes the importance of understanding a fund manager's philosophy.
Gajendra Kothari’s Portfolio Secrets
Gajendra reveals that 90% of his SIPs are in aggressive funds like Small Cap and Sector funds. He also shares that he is waiting for a 25% correction to invest more aggressively.
Factor Funds Investing Guide
Gajendra shares that he has been doing homework on factor funds for the last one year. He also shares that he has started moving forward with interest.
Stock Market Crash Explained
Gajendra stresses that the markets too work a lot like physics. He also shares that everything in our life is cyclical.
Quick Rapid Fire Round
Gajendra shares that he prefers Liquid Funds to keep the emergency fund liquid.
SIP Vs Lumpsum – Who Wins?
Gajendra shares that Lamsum is better and creates more wealth.
3 Best Mutual Funds to Invest
Gajendra shares that if you want to invest in three funds then you can take a passive fund like a factor fund, get a small cap and take a multicap.
Retirement Planning using SWP
Gajendra shares that SWP can be used for retirement planning.
Maximum Loss & Profit in 1 Day
Gajendra shares that maximum loss theoretically was to CR but there was no loss for him.
Should We Invest in NFOs?
Gajendra shares that the cost of new fund will remain high because it is at a smaller base.
Should We Invest in ELSS Funds?
Gajendra shares that you should not invest in ELSS funds from tax point of view but just consider it as a normal mutual fund.
Biggest Mistake in Stock Market
Gajendra shares that he developed that a lot at FAO in the beginning.
How I Met Warren Buffett
Gajendra shares that he went to US for buffet.
