Who doesn’t want to be a millionaire? People waste their time watching endless videos about how to get financial independence in their 30s, but that is not enough. Through this blog, we are here to help you with the correct information and direction about how are Indians become millionaires through Stock Market Investing, but at the end of this blog, it is only your responsibility to take the required actions.
In India, as of 2024 data, there are over 3,26,400 millionaires, many of which credit the stock market for their success.
The Changing Landscape of Stock Market Investing in India
Indian people now understand that there are only two ways of making money – earn money from one source and compound your savings by investing. People are getting familiar with the stock market, and the factors contributing to this are:
- Smartphone availability and the rise of fintech platforms like Zerodha, Groww, Angle One etc., have contributed to the participation of retail investors in the stock market.
- As of August 2024, India has more than 170 million Demat accounts. Rapid growth in domestic financial institutions and financial innovations has led to retailization of India’s economic market.
- The rise in sources like various websites, blogs, YouTube, journals and news where you can achieve financial literacy and the rise of finfluencers has also made investors aware of the power of investing.
- The changes in government policies and new laws enacted for investors’ protection are equally responsible for this changing landscape of stock market investing.
- Availability of various investment vehicles.
Key Strategies Indians Are Using to Build Wealth
- Save and invest consistently – Consistency is the key. Indian people now understand that planning their expenditures and regularly putting a chunk of their earnings into some fund is crucial. It enables them to multiply their savings and lets their money work for them.
- Tax optimisation – In countries like India, where many tax rates and tax exemptions are provided under various standards, investors are legally minimizing their tax liability and utilizing deductions on expenses provided by the GOI. Savvy investors invest in investment vehicles or funds on which they get exemptions and deductions.
- Debt Management – The trend of using loans/debts has also increased due to financial innovations over the last decade. Debt management means building a plan to repay debts efficiently, utilizing loans/credits available at lower interest costs, and investing access money in the stock market smartly, where they get the profit that exceeds their interest in borrowing.
- Generate Passive Income – It is nearly impossible to generate wealth if there is only one source of income. People are finding other ways to create multiple income sources to earn passive income.
- Diversifying the investment – Investing in stocks is not enough. It is equally important to diversify your investments into various investment vehicles in order to minimize the investment risk and get higher returns. Investors choose a balanced portfolio over a concentrated one.
Example of Indian Stock Market Millionaires
- Vikas Kedia – started by investing Rs. 35,000 in 2004 and now has a current portfolio value of almost Rs. 1000 cr.
2. Mohammed Anwar Ahmed – started with Rs. 10,000; Anwar’s portfolio value is Rs. 500 crores today. He also received cumulative dividends on his stock investments amounting to Rs. 118 crores till 2017.
3. Rakesh Jhunjhunwala – He is considered to be the most successful Indian trader. With a net worth of $3 billion, Jhunjhunwala was among the March 2018 list of billionaires.
Challenges and Risks Faced by Indian Investors
Till now, through this blog, we have brought the bright side of investing in the stock market. But now, let’s understand the other side of the picture. Everything that rewards you comes with a risk. Likewise, these millionaires face some challenges and risks, and mitigating these risks is crucial. Of them, we are below:
- Too much information – In today’s world, there is so much information to get, like a constant stream of news, media stories, social media posts, YouTube videos and whatnot. Sometimes, ignoring the noise and picking up the correct information to make informed investing decisions becomes difficult.
- Rise of Advertising, Social Media & Influencers – Often, investors go with the hype created by social media and influencers. Due to their FEAR OF MISSING OUT, they have their money invested in an investment product that is not worth investing.
- Too many choices – You may open any broker application and execute trades find various investment choices there. Sometimes, investors get overwhelmed by these choices when these many options are presented. In this case, they either give up and do nothing or choose the investments that grab their immediate attention, which is not the right way of investing.
Stepwise guide to become rich
In a report by Credit Suisse, it was written that if an adult wants to be part of the wealthiest 1% in India, then they should have a minimum wealth of $150,902 per adult, which is approx. 1.3 crore. This seems like a lot of money to some readers, but if you follow these 7 steps, you may also achieve this fortune.
- Create financial goals – Create a plan and your monetary strategy. Ask yourself, what’s your definition of being rich? What’s your monthly budget? Do you want to retire early, or do you’ve further goals? Answer these questions to make a clear road map toward your goals by following the right steps involved in financial planning in India.
- Clear all debts – By paying off high interest-bearing debts, list all your debts and pay extra on your EMIs to reduce the principal outstanding.
- Budgeting and saving – Consider three things – Make an estimated list of monthly income and monthly expenses, analyze major spending in that list and filter out the expenses you can minimize, and lastly, search for the areas where you can save, like creating emergency funds, repay your debt and monthly investing.
- Paying yourself first – Create an emergency fund by keeping a fixed monthly amount in your bank account aside.
- Start investing at early age – The most essential part of creating your wealth for the long term is that it also helps your money abstain from getting devalued. Start investing in the stock market by buying shares, mutual funds, ETFs, Index Funds etc.
- Increase earnings – Only investing is not enough, but knowing how much return we are getting from our investment and trying to increase our earnings should be the goal. Reinvest your earned returns and keep track of your investment regularly.
- Create additional source of income – No millionaire or billionaire is dependent only on one source of income. You need to find new ways to earn passive income. Invest in your skills or collect ideas to get started your side hustle.
- Adopt a mindset – Last but not least, try to be patient, keep learning, start slowly and gradually and be consistent in your investment journey.
Conclusion
Becoming a millionaire through stock market investing is now possible if you use the right strategies, stay disciplined, and adopt the proper mindset. As we’ve seen, many Indians have built their wealth by saving, investing, spreading their risks, and learning about finance. Yet, you must be careful about too much information and rash choices.
This blog gives you clear steps to follow on your path. Keep in mind that you can’t get rich overnight; you need to be patient, keep at it, and make wise choices. The stock market is just a tool—how you use it and think about it makes it grow your money. Why not start today? You might become India’s next millionaire. It’s up to you!
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