Category: General

Wealth must help you win back your time.

For the first 10–15 years of your career, most of your energy goes into building a life

• A better home

• A comfortable lifestyle

• Good education for your children

• Memorable holidays

• and more

And that’s absolutely fine. Wealth should enhance your life

But at some point in your late 30s or early 40s — a quiet question starts to surface:

“Where is all my time going?”

“Why don’t I have enough time for myself and things which truly matter”?

You find yourself constantly busy, always rushing, and rarely in control of your own schedule.

You have the comforts, but not the calm.

You have the income, but not the space to do what you truly want.

• If you want to wake up late today because you were tired last night – can you do that freely?

• If you want to take a month-long vacation — can you do that without seeking permission?

• If you want to focus on your health and hit the gym at 10 AM — can you?

More often than not, the answer is NO

You start feeling restricted, like your time is owned by something (or someone) else. You sense that you’re not fully creating a life that reflects what you truly want.

That’s where the deeper purpose of wealth begins to emerge — not just to upgrade your lifestyle, but to upgrade your freedom.

True wealth should create choice. The choice to

• to slow down

• to say no,

• to work on what matters to you.

• to take a break — not because you’re exhausted, but because you can.

  

This is what financial independence is really about — not retiring early in the literal sense, but reaching a point where you are no longer trapped by obligations.

Where your time belongs to you.

So here’s a question worth reflecting on:

A few weeks? A year? A decade?

Financial Freedom is all about creating enough wealth to buy back your entire life time, and decide how you want to move forward from there.

Thats FIRE (Financial Freedom Retire Early) .. thats missionFIRE!

As your wealth grows, ask yourself one simple question: Is it buying me more things, or more time?

Because true financial freedom begins when your calendar reflects your priorities—not your obligations.

Let me tell you about the concept of “Point of No return” in Personal Finance

But first lets understand the concept in General with analogy from Health

You were once energetic, healthy, and fit.

You slept well, recovered quickly, and rarely thought about your health because it simply worked. Your body responded effortlessly, your energy levels were high, and annual health check-ups were just another routine exercise.

Then life happened.

Work became demanding. Responsibilities increased. Stress became normal. Sleep reduced. Exercise became occasional. Convenience slowly replaced discipline, and taking care of yourself moved lower and lower on your priority list.

A few extra kilos appeared. You barely noticed.

Then came a few more. You started feeling older. Climbing stairs became harder. Your health reports began showing early warning signs.

Every few months, you thought about doing something. Joining a gym. Going for walks. Sleeping earlier. Eating better.

But each time, it felt difficult.

• “I’ll start after this busy phase.”

• “Next month.”

• “Once life settles down.”

But life never really settles down.

Years passed. The weight increased. Energy levels dropped. Medication entered your life. What could have been fixed with small changes now required major lifestyle adjustments, regular tests, and constant monitoring.

• The problem was never the first few kilos.
• Those were easy to reverse.
• The problem was believing you could always reverse them later.

And then one day, it was no longer about losing weight. It was about managing diabetes, controlling blood pressure, protecting your heart, and limiting the damage that had already been done.

Can things still improve?

Absolutely.

But what once required small daily choices may now demand years of discipline, medication, lifestyle changes, and significant effort.

But can you fully return to the health you could have preserved years ago?

Sometimes, no.

Not because you don’t care enough. Not because you lack motivation. Not because you finally don’t understand what needs to be done.

The regret is real. The intention is genuine. The motivation is stronger than ever.

But time has changed the equation.

You have reached the “Point of No Return”

A similar thing happens with money.

Financial problems rarely arrive overnight. They build quietly, through small delays, ignored decisions, and the comforting belief that there will always be more time.

Most of us begin our financial lives with something incredibly valuable: time, energy, and potential.

Our starting points may be different, but by our mid-twenties, Most of us can imagine a future we want to create: a life of financial freedom, a comfortable retirement, security for our family, meaningful experiences, and the ability to make choices without constantly worrying about money.

These dreams are usually achievable.

Not because we earn a lot of money or know everything about investing, but because we have time.

Then life happens.

We get married. We move cities. We buy a house. We have children. Careers become demanding. Parents need support. Unexpected expenses arrive.

Slowly, we drift away from the future we once imagined.

Some drift is natural. The problem is not that life changes.

The problem is that we believe we can always correct our course later.

Hope becomes our strategy.

We stop making plans and start making assumptions.

At the same time, instant gratification quietly takes over.

1. Every salary increase becomes an excuse to upgrade our lifestyle instead of upgrading our future.

2. We choose convenience over discipline.

3. We prioritize today’s comfort over tomorrow’s freedom.

And because life feels manageable right now, we assume it will somehow work itself out.

But it rarely does.

• Hope feels good.
• Comfort feels good.
• Delaying difficult decisions feels good.

The problem is that while comfort gives us relief today, it silently steals options from our future.

Every year we postpone important decisions, we move a little closer to our financial point of no return.

• The point where debt repayments consume so much of our income that saving becomes impossible.

• The point where retirement goals demand a ₹3 lakh monthly SIP because we waited too long.

• The point where our children are entering Class 12 and we still haven’t built an education fund.

• The point where our skills become outdated and younger professionals start replacing us because we never invested in learning.

• The point where the lifestyle we’ve built becomes impossible to sustain without constant financial pressure.

• This is why financial freedom is not something you can build at the last minute.

It requires years of small, consistent actions.

The tragedy is that most people don’t realize they’re moving towards the point of no return because the journey feels comfortable.

There are no warning signs.

Just small delays, repeated over many years.

And then one day, you discover that what once required discipline now requires sacrifice.

What once required sacrifice now requires extraordinary effort.

And what once seemed possible starts looking impossible.

That’s the point of no return.

The good news?

If you’re reading this and feeling uncomfortable, you probably haven’t reached your financial point of no return.

Discomfort is often the first sign of awareness.

And awareness creates a choice.

You can continue hoping that time, income growth, or future opportunities will solve today’s financial challenges.

Or you can act now.

• Start investing.

• Take this 25 question Financial Health Checkup

• Reduce debt.

• Build your emergency fund.

• Upgrade your skills.

• Protect your family.

• Create a plan for financial freedom.

Start your missionFIRE journey.

If you need support, talk to our team to get started with your investments

Because financial freedom is not built through one big decision.

It’s built through hundreds of small decisions made early enough.

The best time to change direction was years ago.

The second-best time is today.

Because every step you take now moves you farther away from the point of no return.

In this article, let’s decode the 6 key changes in EPF 3.0, comparing the Old Rules vs New Rules, and understand what they mean for you.

Change 1 : Simplification of Withdrawal Reasons

Earlier, there were as many as 13 different reasons for which you could withdraw from your EPF account such as marriage, education, home purchase, loan repayment, or medical treatment. Each had its own form, limit, and set of conditions.

Under the new EPF 3.0 rules, all these fragmented reasons have been merged into three simple categories — Essential Needs, Housing Needs, and Special Circumstances. This move makes the withdrawal process more straightforward and eliminates confusion for members who earlier struggled to figure out which clause applied to them.

Change 2 : Standardization of Withdrawal Limits

The new rules have brought uniformity and simplicity in withdrawal eligibility. Previously, every withdrawal type had different tenure requirements and calculation limits.

Now, members who have completed at least 12 months of service can withdraw up to 100% of their eligible EPF balance, which includes both employee and employer contributions, along with interest — provided they maintain a minimum of 25% of their corpus in the account.

The process now relies on self-declaration and requires minimal documentation, making withdrawals faster and more accessible.

Change 3 : Relaxation Under Special Circumstances

Under the old EPF system, if you were unemployed or faced a natural calamity, you needed to provide documentary proof before getting approval for withdrawal. EPF 3.0 completely removes this requirement.

Now, you can withdraw your funds without giving any specific reason or submitting proof, under the “Special Circumstances” category. This reform gives members greater flexibility during urgent financial needs and reduces bureaucratic delays.

Change 4 : Full and Final Settlement Rules

Previously, when an employee became unemployed, EPF allowed 75% withdrawal after one month and the remaining 25% after two months.

This timeline has now changed. Under EPF 3.0, you can withdraw up to 75% of your EPF balance immediately, but you must wait for 12 months of continuous unemployment to withdraw the remaining 25% and close the account completely.

The pension component (EPS) comes with a longer waiting period — you can withdraw it only after 36 months of non-employment. This change ensures that some funds remain as a cushion and encourages long-term savings.

Change 5 : No Employer Approval Required

One of the biggest pain points in the older system was the need for employer approval while withdrawing or transferring your EPF balance.

Often, this caused unnecessary delays, especially when employees changed jobs or had disputes with past employers. EPF 3.0 eliminates this step entirely. Now, if your UAN is linked with Aadhaar and your KYC details are verified, you can process your claim or transfer without any employer intervention.

This gives members complete independence over their EPF accounts.

Change 6 : Automation and Faster Claim Settlement

The EPFO is now moving toward a fully automated, self-service model. Earlier, only claims up to ₹1 lakh were settled automatically through Aadhaar-based OTP verification.

With EPF 3.0, the auto-settlement limit has been increased to ₹5 lakh, and face authentication via the UMANG app has been introduced for enhanced security and convenience.

This means faster processing times and fewer manual checks, significantly improving the member experience.

Final Thoughts

The new EPF 3.0 rules are a significant step toward making India’s retirement savings system simpler, smarter, and more accessible.

With just three withdrawal categories, uniform service criteria, digital verification, and automated processing, the process is faster than ever before.

However, even with these new flexibilities, remember that your EPF is primarily meant for long-term financial security, not for short-term cash flow needs.

If you use it wisely, these changes can help you enjoy both liquidity and peace of mind on your path to financial freedom.

India has finally witnessed a landmark change in the GST regime.

After years of debate, the complicated structure of multiple GST slabs has been streamlined by govt. The new structure will now have only two main slabs – 5% and 18%. Additionally, a 40% slab exists but is largely meant to discourage luxury/penalty-category consumption and applies to very few items.

The biggest shift is the removal of the 12% and 28% slabs. Almost all items from these slabs have now been moved to the lower slab below them:

• 99% of items from 12% → moved to 5%

• 99% of items from 28% → moved to 18%

This alone impacts a huge chunk of household spending and makes goods more affordable. Lets check its impact on things which we consume

Life & Health Insurance are GST exempt

This was most awaited and demanded from last many years. Finally govt has fully removed GST on life and health insurance policies. With this tax gone, premiums are expected to come down by around 10–15%. It may not be a full 18% cut, because insurance companies will lose the ability to claim input tax credits on their own expenses, however for consumers, it still means insurance will finally become more affordable and accessible.

Note that these changes are applicable only from 22nd sept, so if your premium is due before that, you need to pay the GST on renewal this time, no matter when you pay the premium

Automobiles – Winners and Losers

The automobile sector has seen a major realignment of taxes:

• Small Cars: GST has dropped from 28% to 18%, which will lead to a noticeable reduction in prices. For millions of middle-class families, buying a car will now be more affordable.

• Luxury & Big Cars: Earlier, these attracted 28% GST plus a 22% compensation cess, taking the total to a steep 50%. Now, this has been rationalized to a flat 40%, as compensation cess is NIL now. While still high, it’s a net reduction compared to before, so prices of luxury cars will also see some relief.

• High-capacity Two-Wheelers (Above 350cc): This is the only category to see a hike. Previously taxed at 28% plus 3% cess (31%), they will now attract 40% GST. Enthusiasts of premium motorcycles will need to shell out more.

Below is a table which shows how prices will change

Medicines & Healthcare

Medicines, especially life-saving ones, are among the biggest beneficiaries:

• Around 33 life saving medicines and drugs are now completely exempt from GST (0%)
• A large number of other medicines have shifted from 12% to 5%, giving additional relief.

Consumer Durables & Household Items

The reform also impacts what households buy every day:

• Consumer durables like ACs, dishwashers, and TVs were earlier in the 28% slab, making them expensive. They are now taxed at 18%, which will make them more accessible to the middle class.

• Essential household products like ghee, butter, oil, biscuits, soaps, and several others have been moved down from 12% to 0% or 5%. Essentials that everyone consumes daily will now be cheaper, directly reducing household expenses.

40% GST on Sin Goods

Also, there is a special tiny slab of 40%, where things like paan masala, gutka, zarda, chewing tobacco, cigarettes will be placed.

The same also applies to sugary and caffeinated aerated drinks, as well as fruit-based carbonated beverages, as they are marked as “sin goods,” where higher taxation is deliberately imposed to discourage excessive consumption due to their harmful effects on health and society.

The luxury cars will also be part of this slab.

📹 #WATCH | After the 56th GST Council meeting, FM Nirmala Sitharaman announces 40% GST slab for sin goods:

✅ Paan masala, gutka, zarda, chewing tobacco, bidi 🚬
✅ Cigarettes & unmanufactured tobacco 🥬
✅ Sugary & caffeinated aerated drinks, fruit-based carbonated beverages… pic.twitter.com/Pn3BIago1p

— Moneycontrol (@moneycontrolcom) September 3, 2025

Overall, this GST reform is expected to give a positive push to consumption, as everyday essentials, household items, and even automobiles become more affordable. While the impact on inflation may not be very large, it will still provide some relief to households already coping with rising costs.

At the same time, this move sends a clear signal of stability and growth, which can boost market sentiment. Investors should view this as an opportunity to stay focused on their long-term investment plans. Continuing with systematic investments (SIPs) in mutual funds and even topping up their contributions during this positive phase can help build significant wealth over time.

In recent years, the concept of FIRE (Financial Independence, Retire Early) has gained massive popularity. The idea of breaking free from the 9-to-5 grind and living life on your own terms is inspiring, and rightly so. We believe that the pursuit of financial freedom is a goal worth striving for.

However, somewhere along the way, the pursuit of FIRE has turned into a race.

I came across a story of a Japanese individual who pushed himself to extreme levels of frugality to achieve financial freedom by age 45. But once he reached his goal, he realized that the emotional and social cost was too high. He found himself financially free but emotionally exhausted and disconnected from the life he had envisioned.

Financial Freedom is a Positive Milestone.

Financial freedom is meant to be a positive milestone. It’s supposed to be exciting, liberating, and full of life. The journey towards it should carry that same positive energy — filled with joyful actions, not misery.

It’s important to balance enjoying life today while also saving and investing for your future

Many people get so obsessed with “getting there fast” that they forget to align their current life with the future they imagine. The result? When they reach their FIRE number, it feels like they’re stepping into a completely unfamiliar world.

FIRE should not be a destination that feels alien. It should be a natural, seamless transition into a life you’ve already been living in small doses.

Don’t over compromise on your life today for “fast FIRE”

Imagine someone trying to lose 20 kg in just 2-3 months. It might sound impressive, but health experts will tell you it’s neither sustainable nor healthy.

Similarly, rushing towards financial independence through extreme cost-cutting, deprivation, or “hacks” often leads to burnout, emotional fatigue, and regret.
The FIRE journey isn’t just about numbers; it’s about the quality of the journey itself.

An overly aggressive approach might get you to your “number” quickly, but it often comes at the expense of relationships, mental peace, and sometimes even your sense of purpose.

There’s always a sweet spot — a pace that challenges you but also respects your well-being. For most individuals with normal incomes and lifestyles, a realistic target for financial freedom is somewhere around the age of 48-52.

• Not too early, because achieving FIRE extremely young requires extraordinary sacrifices.

• Not too late, because waiting until traditional retirement age defeats the essence of FIRE.

It’s essential to remember that:

• You aim for a fit body, not reckless weight loss.
• You nurture quality relationships, not hurried connections.
• You build a healthy investment journey, not chase overnight returns.

FIRE works the same way.

We’ve written a detailed article explaining 7 reasons why financial freedom is crucial in today’s world.

Jagoinvestor: Your Partner in the FIRE Journey

At Jagoinvestor, our core mission is to empower individuals to achieve financial freedom well before the traditional retirement age. We help them stay on track and reach their FIRE goals with clarity and confidence.

We specialize in supporting our clients with the right frameworks, investment paths, and disciplined approaches to ensure their FIRE journey is sustainable, meaningful, and aligned with their personal aspirations.

We believe in building a strong foundation that allows you to reach financial freedom in a way that feels natural, fulfilling, and life-enhancing.

If this resonates with you, you can apply for our wealth creation services, and we’ll be happy to have a conversation and explore how we can help you achieve your financial freedom mission.

Many people unknowingly fall into a wealth trap that looks like success—but feels like suffocation.

They keep investing in places where their money gets stuck—real estate that can’t be sold easily, long-term instruments with rigid lock-ins, complicated schemes that block access during emergencies, or businesses where money is tied up indefinitely.

On paper, it feels like they’re building wealth. Technically, they are—but it’s rigid wealth.

It looks great in numbers, but in reality, it feels like a cage.

Their net worth grows, but they still feel anxious. Their portfolio shows high value, but they feel trapped—unable to use that wealth freely.

Why do people fall into this trap?

The reasons are simple but dangerous. Fear of missing out on “big returns,” the illusion that long-term lock-ins automatically mean discipline, social pressure because everyone around them is doing the same, and the deep belief that real wealth must always be in hard-to-touch assets.

But here’s the harsh truth most people avoid: Wealth that cannot move with you, cannot protect you.

That’s why many investors, despite having sizable portfolios, constantly feel uneasy. They feel anxious despite being “wealthy,” restless despite their long-term plans, and powerless despite appearing successful. They have no financial agility. Their money may be growing, but their freedom is shrinking.

Many realize too late—“In an emergency, I can’t even access my own money.”

And here’s something worth remembering—if your wealth is growing but it’s not bringing you peace or calm, that wealth has far less use than you think.

The deeper truth is simple: Wealth isn’t just about growth—it’s also about accessibility.

Liquidity isn’t boring; it’s power. Wealth that doesn’t let you sleep peacefully isn’t wealth—it’s just numbers on a screen.

What do you think on this ?

Create your Wealth with Jagoinvestor Team

If you’re serious about transforming your financial life and avoiding these costly mistakes, the Jagoinvestor Team is here to guide you. We’ve helped thousands build meaningful wealth with clarity, discipline, and a proven roadmap. If you’re ready for real progress — not just information — join hands with us. Fill up this form and let’s start your wealth journey the right way, with the right support

One of the most important factors of having a good financial life is a good and rising income. To create wealth, you need to constantly invest money and grow it over the years — but that journey begins with a solid income that keeps increasing meaningfully.

However, many of the people we work with often share their frustration: despite working hard and staying committed to their job, their income remains stagnant, and raises are uncertain.

Most people wonder why this happens. While external reasons — like company performance or market conditions — do play a role, in our experience, the bigger reason is internal: mindset, habits, and personal choices that silently block income growth.

I asked 340 of our clients and community members

That’s when I decided to dive deeper and use the community wisdom to find out what most people think.

Why don’t people see a sharp rise in their income over time? I’m not talking about the standard 5–6% annual increment — I’m referring to those powerful 15–25% jumps that change your financial trajectory and speed up wealth creation.

So we ran a poll among our clients and network. The responses were insightful — and eye-opening.

Let me walk you through the real reasons why income doesn’t rise as much as it could.

1. They stop learning and upgrading their skills (57%)

This was the top reason why most people don’t see a meaningful increase in their income over time.

The world is evolving rapidly, yet many professionals stop learning once they settle into a job. They get into comfort zone and life gets complicated. They either are so consumed with life or they are not able to see the vision of where the company and sector is headed.

What made them valuable 3 years ago may now be basic or obsolete. Continuous skill upgrades — especially in tech, tools, and strategy — are essential to stay relevant and command higher pay. This is mostly true for IT field

2. They fear change and avoid new challenges (15%)

Around 15% of respondents felt that fear of change and discomfort with challenges is a major reason for income stagnation.

Career growth requires courage — the willingness to take on unfamiliar roles, lead new initiatives, relocate if needed, or even change jobs. But many professionals prefer the comfort of routine over the uncertainty that comes with growth opportunities. Not everyone embraces challenging tasks that push their intelligence and problem-solving ability.

Unfortunately, this fear often stalls progress and limits income growth. In most cases, people are paid in proportion to the initiatives they take, the risks they handle, and the results they deliver — not just the years they spend in a role.

3. They stay too long in one role or company (14%)

This is something we hear often during our annual reviews with clients. Many professionals stay in the same role or company for years, believing that loyalty will pay off or that staying put is the better path for compounding. While that sounds good in theory, the harsh reality is different.

Most companies don’t offer substantial hikes to existing employees, no matter how consistent or loyal they’ve been. Ironically, the same person — if hired externally — would often receive a significantly higher package. Staying in the same role too long without new responsibilities or promotions frequently results in being underpaid relative to market value.

Strategic job changes or internal role transitions are often necessary to reset and accelerate your income trajectory.

4. They don’t take initiative or go beyond basic job duties (13%)

One major reason many people don’t get significant salary hikes is that they operate strictly within the boundaries of their job description. They complete tasks as assigned — and while that’s appreciated, it’s rarely enough to justify a big raise.

As an employer myself, I’ve noticed that some employees do their job well, but they never think beyond what’s explicitly mentioned. They wait to be told, rather than sensing what needs to be done. But then there are others — a rare few — who operate like owners. They hear what’s unspoken, anticipate needs, and take charge like entrepreneurs within the system.

That level of ownership and initiative is what truly stands out. These are the people who unlock faster career growth — because companies reward those who think like leaders, not just doers.

Now lets look at some more reasons which got less than 10% votes and were not the top most reasons majority felt.

5. They believe hard work alone will get noticed 

Hard work is important, but visibility matters too. Simply being reliable or clocking long hours won’t automatically lead to raises. Strategic contributions, aligned with business goals, and making them visible to the right people is what drives real income growth.

6. They waste time on low-value tasks that don’t impact growth

Being busy isn’t the same as being valuable. Many professionals fill their days with tasks that don’t move the business forward. Focusing on high-impact, strategic work is what separates average performers from high earners.

7. They avoid asking for a raise or promotion

Some employees assume management will notice their efforts and reward them. But in reality, raises often go to those who confidently advocate for themselves. Not asking is one of the simplest reasons people stay underpaid.

8. They have poor communication skills

No matter how skilled you are, if you can’t communicate clearly, influence others, or present ideas effectively, your leadership potential is hidden. Strong communication often unlocks bigger roles — and higher pay.

9. They don’t build internal relationships or network

Career growth isn’t just about what you know — it’s also about who knows you. Building relationships within your company helps with visibility, collaboration, and getting pulled into high-impact projects. Being invisible is a slow road to growth.

10. They don’t track or showcase their achievements

Many professionals do good work but never document or present it. Without showcasing results, managers may underestimate your contribution. Keeping track of your wins and communicating them is crucial for justifying a significant raise.

Don’t Let Your Income Plateau

Your income is one of the biggest drivers of wealth creation — especially in the first 10–15 years of your working life. Most people focus heavily on budgeting and saving, but overlook the single most powerful lever they have: increasing their earning potential.

If you’re serious about building wealth, reaching financial independence, or simply improving your quality of life — then you must treat career growth and income acceleration as non-negotiable.

Use this list as a mirror. Identify what’s holding you back. And most importantly — act on it.

Because while compounding works on your investments, it works even faster on your income — if you put in the effort.

Create your Wealth with Jagoinvestor Team

If you’re serious about transforming your financial life and avoiding these costly mistakes, the Jagoinvestor Team is here to guide you. We’ve helped thousands build meaningful wealth with clarity, discipline, and a proven roadmap. If you’re ready for real progress — not just information — join hands with us. Fill up this form and let’s start your wealth journey the right way, with the right support

Over the past couple of years, ITC (read as Indian Tobacco Company) has been in the news, as it moves to demerge the hotel business from other core operations of the company. For retail investors like you and me, this is a mega event because ITC is a behemoth and when they decide to separate their businesses, we get to learn a lot more about investing by studying them rather than listening to ‘10 best investment picks this year’ from some fin-influencer.

This is a detailed account of my thoughts on the stock. 

But first, an honest confession.

The first draft of this article was absolute bullshit. Since, I was more interested in drum beating about my investment prowess of buying the stock when no one wanted and keeping it in the portfolio for the last 3 years in which the stock has nearly tripled in value.

That’s where Mr Nandish Desai reminded me that I didn’t merely hold it because I didn’t have anything else to buy. I held it because I was completely sure about the value and potential of the business. And demerger was a great way to unlock it. Like an elder brother, he told me that our job is to share our learnings and not chest-thumping.

Without wasting much of your time, I will start with the article now. There are certain sections where you might feel that you already know this information, in that case, feel free to skip that section and move on to the next.

The intention of this article is to create a masterclass in understanding demergers via ITC.

ITC a Behemoth – A Brief History

The company’s roots can be traced back to the humble streets of Kolkata back in 1910. In those days, Kolkata was the hub of businesses due to its close proximity to the Bay of Bengal as it enabled overseas trade.

Spanning over 115 years, the company has expanded its product portfolio from cigarettes to hotels to agriculture to beauty products. The company 

Source: Jagoinvestor, ITC

Very few companies can be relevant for 100+ years. This extended time period speaks a lot about the company’s management and the way it’s being run.

Sometimes as investors, we get completely blindsided with the kind of work it takes to keep such a large company moving. We are always interested in our money growing and there’s nothing wrong with it. It’s our expectations that are completely incorrect to such a degree that we expect a large cap to move like a small cap.

We look for 30% to 40% growth in such companies year on year. Well, let me be honest with you, it’s not possible at all. Regardless of which fin-fluencer says, it’s simply not possible.

Visionary companies don’t just stick to one product line along the way, they diversify. There’s a school of thought in many seasoned investors that diversification should be in related industries only. Else, it becomes a cash guzzler of sorts.

But here’s the difference.

India’s economy opened up in 1992. That means, Indian companies had to be under License Raj from 1947 to 1992. Those were tough times. Unlike today, when any founder from the Rural parts of India can challenge a large institution based on his or her own merits. We don’t need family names anymore in order to move ahead.

You don’t need to be an Ambani or Birla to disrupt any particular sector anymore. Look at how Mr Deepinder Goyal of Zomato has disrupted how we experience food and grocery delivery. Same goes for Mr Bhavish Agarwal who is redefining Ola from a transport company to an auto manufacturer and slowly putting his feet into the evolving semiconductor industry.

It’s funny how Mr Rajiv Bajaj of Bajaj Auto isn’t able to reconcile with this change, since they are the businesses of a generation that thrived when there was simply zero competition.

ITC in its own way is in a very long battle. Right from hotels and agriculture to IT and personal care products, this company is facing a massive amount of competition.

It’s the Cigarettes business which is the cash cow of the company that is helping to fight these battles on multiple fronts.

Think about it – the cigarette business is responsible for close to 80% of operating profits (or EBIT) of the company. And yet, it needs just 8% of capital every year to keep it going.

Suppose this year the company did a sale of Rs 10 lakhs. Out of this Rs 8 lakhs comes from cigarettes business alone. And how much does this business division require to run itself?

Just Rs 80 thousand only. 

With Rs 80 thousand or as I wrote earlier – 8% of capital, the company is able to operate its plant, supply its products to the end consumers, pay for their salaries and everything.

But here’s an interesting take in this – Hotels business

In similar light, Hotels consume close to 22% of capital every year but only contribute 3% of operating profits (or EBIT) for the company.

These are not just numbers, it’s a point at which an investor’s blood should boil.

Because ITC has been doing massive capital expansion (‘capex’) for the last 10 years. Here’s a chart for you to look at.

Source: Jagoinvestor, screener.in

This is a bit technical, if you don’t wish to read it – please skip to the next section.

In Capex we define money that is left after for buying and selling of fixed assets such as land, building, plant & machinery, acquiring new businesses and some other selected investing items from the Balance Sheet.

So every year, the money that is used for expansion of business is taken into account and divided by ‘depreciation’ which is wear and tear on these assets.

If this capex / depreciation = 1, then every new addition is equal to the one that is replaced.

When it’s around 2, then it means some real capacities are being added.

But first, a quick word on ‘depreciation’.

When you buy yourself a nice car, you will not sell it for the same price right. Suppose you bought a Maruti car for Rs 10 lakhs and after 3 years of driving it for 50,000 odd kms, you will sell it for Rs 6 lakhs.

Simple math tells you that the car lost Rs 4 lakhs in value. 

NO.

Simple math doesn’t apply here. In the accounting framework, we get the invisible hand of depreciation that accounts for your use of the car, repair and maintenance work, etc – in short wear and tear. 

So, after 3 years, after depreciation when your car’s value is Rs 5 lakhs, then you have made a gain of Rs 1 lakh on the sale of your car. Truth be told, you will be TAXED!!

Now back to ITC’s chart.

In the last 10 years, ITC has been on a capital expansion spree. And most of this money has gone into building its world class hotels which has resulted in very little revenue growth for the company.

Pouring too much money to earn very little is the reason why most Institutional Investors stayed away from the stock. 

Here’s the proof.

 

From 2015 to 2021-22, return on the stock was 0. 7 years and the stock price return = 0.

And then something happened!

The rumours of demerger began. The Hotels business was going to now be separated from the other businesses of the company.

The stock price slowly started moving up.

In July 2023, Board of Directors of ITC Ltd, approved of this demerger. And this was a mega event. Something that everyone was waiting for.

 

Source: Jagoinvestor, ITC Presentation

Following this news something else too changed. Let’s take a look.

 

Foreign (FII) and Domestic (DII) Institutional Investors jumped at this opportunity. The stock began its movement after 7 years of stagnation.

It caused many retail investors to just sell the stock and exit. Because they were not tired and bored of holding this stock in their portfolio. For them, it was a permanent value trap. Hence, as soon as they got some good gain, they exited.

At this time, the Indian equity market was in the middle of a small and mid-cap boom. So retail investors were more interested in cashing that opportunity out and as a result their shareholding which was 45% before the announcement dropped to a mere 15%. While FII went up from 12% to 43%. DII largely remained the same.

The stock price jumped from Rs 200 to nearly touching Rs 500 in a matter of 2 years. 

The reason why FII bought the stock is because Demerger unlocks Value.

ITC’s non-hotels business consists of Cigarettes, FMCG such as Ashirvaad Atta, etc., paper industry, agriculture and IT are tremendous cash generating machines. When they will be accounted for separately, they will dish out good profits that will benefit the shareholders over the long term.

Hotels business on the other hand will now be subjected to a litmus test of performance. So the management will now have to be very careful about how much money they are investing and to what extent they are making profits.

The real test for Hotels will begin now. While the other businesses will be free from having to carry the burden on their shoulders.

Conclusion

As retail shareholders, we often miss the point of demergers. Maybe because we don’t fully understand the kind of stock price return it can generate for us.

Plus, demergers are long drawn corporate actions that take a couple of years to fructify. In such a time, it’s our impatience that tends to get in the way. Something else is always going up and someone is always making more money. We just miss out on our portfolio that can compound massively.

As retail investors, we should always check for these special situations and look for an incremental institutional ownership. If that happens, they all we need to do is fasten our seat belts and enjoy the ride!

Jinay Savla, Jagoinvestor

 

What superpower do you have as an investor?

When we think of the word “superpower,” we often picture iconic figures like Superman or Batman—individuals with extraordinary abilities that set them apart from the rest. But in the world of investments, superpowers aren’t confined to a select few; they are qualities or circumstances that give us an edge in our financial journey.

They are powerful traits or situations that can set one investor apart from another, whether through luck, hard work, or strategic decision-making.

These superpowers can significantly elevate your financial life and place you ahead of others on the path to success.

Recently, I posed the following question to our clients only whatsapp group

What are your superpowers as an investor that are helping you create the financial life you truly desire?”

The responses were enlightening, revealing how some superpowers were common for most people while some superpowers were almost missing in that group of investors.

I’d like to share the results with you. This was a multiple choice question, so we don’t have data on how many people exactly took the poll, but we expect it to be around 140-150 people participated in the poll.

Let’s dive in.

Poll Question

What are your superpowers as an investor (multiple choice) that are helping you to create the financial life you truly desire?

Super Power	Number of Votes
I am highly disciplined in saving/investing.	115
I am debt-free	63
I live well below my means.	42
I don’t feel guilty spending a good amount of money on things that enhance my enjoyment of life	30
I have a very well-balanced life	29
Money does not control me	7
I already created a good net worth early in life	6
I don’t get stressed due to money issues	5
I earn a very high income.	3
Luckily, I am going to get a good amount of wealth in Legacy	2
I don’t worry about the future	1

 

Superpower #1: I am highly disciplined in saving/investing.

(Votes: 115)

This superpower received the highest number of votes, likely because it was evaluated by a special group—our clients, who are accustomed to regular guidance. This is a disciplined group in itself, which explains why it garnered the most votes. However, I suspect that if we conducted a similar poll among a more general audience, the number of votes for this superpower might not be as high.

This superpower reflects the ability to consistently prioritize saving and investing over immediate gratification. It involves making strategic decisions that ensure long-term financial growth and stability.

Discipline in saving and investing is the cornerstone of wealth-building. It allows investors to benefit from compounding returns, navigate financial challenges, and achieve financial independence more quickly than those who lack this focus.

Superpower #2: I am debt-free.

(Votes: 63)

Almost everyone around the age of 40-45 has some form of home loan or car loan. People often buy a house by their early 30s or mid-30s and then pay off the loan over 15-20 years. A significant portion of their income goes toward EMI each month, which could otherwise be directed toward saving for the future.

Living debt-free is liberating; it provides more financial flexibility and reduces stress. I am pleased that the second-highest number of votes went to this option.

Superpower #3: I live well below my means.

(Votes: 42)

A lot of people also said that they are living below their means, which simply means they are spending much less than they are earning. It involves making conscious lifestyle choices that prioritize saving over spending.

This superpower is crucial for accumulating wealth. By controlling spending, investors can save more, invest wisely, and avoid debt, leading to a more secure financial future.

Even with a moderate income, some people can achieve this. It also means adopting a lifestyle that does not require a large corpus at the end. This may be why many people with less wealth than others may feel financially free compared to those with more wealth.

Superpower #4: I don’t feel guilty spending a good amount of money on things that enhance my enjoyment of life.

(Votes: 30)

This was an interesting one.

This superpower reflects a healthy balance between saving and spending. It represents the ability to enjoy life’s pleasures without guilt, knowing that financial obligations are met.

India is predominantly a savings-oriented economy, and we are all taught to save, save, and save. Many of us didn’t experience much wealth in our childhood, and spending was often seen as an irresponsible trait. As a result, we tend to develop a highly negative view of spending, making our default approach one of “not spending.”

This is ironic because we save precisely for that retirement phase when we can finally spend our money.

Financial wellness isn’t just about accumulating wealth; it’s also about enjoying life. This balance ensures that investors can pursue happiness while still being responsible with their finances.

Having a lot of wealth without this superpower means that your wealth has less meaning for you.

Superpower #5: I have a very well-balanced life.

(Votes: 29)

Not many mentioned this, but those who did report that they lead a well-balanced life, which simply means managing work, finances, health, and personal time effectively. It indicates a holistic approach to life and financial management.

Most people focus so much on earning money that they lose their own identity and neglect their health and other important aspects of life, thinking, “I will do it later.”

This can lead to burnout and damage both mental and physical well-being.

It’s important to have this superpower, where you consciously avoid letting money dictate your schedule.

Now, we are moving towards those superpowers where we didn’t get enough votes and this gets interesting

Superpower #6: Money does not control me.

(Votes: 7)

This superpower signifies that a person does not let money control their mind or actions. Financial decisions are made without being driven by greed, fear, or societal pressure.

When money doesn’t control you, you can make rational decisions that align with your values and long-term goals. This detachment helps avoid impulsive choices that could jeopardize your financial future, whether related to career moves, major purchases, or displaying assets.

For much of our lives, we strive to accumulate wealth and increase our income, often engaging in actions that we don’t genuinely desire.

It’s noteworthy that very few people voted for this superpower.

Superpower #7: I already created a good net worth early in life.

(Votes: 6)

Few people feel they created a substantial net worth early in life. Similarly, fewer individuals believe they were fortunate enough to accumulate a significant amount of wealth in the early years.

A strong financial start is crucial for long-term success, as it allows compounding to begin earlier in life. For example, if someone saves ₹10,000 a month, in just 10 years, they could accumulate ₹20-25 lakhs. At this point, the corpus itself might generate an additional ₹2-3 lakhs annually through returns, without any further contributions from the investor.

However, it’s possible that many people compare themselves to high earners and feel that their early start wasn’t as advantageous in comparison.

Superpower #8: I don’t get stressed due to money issues.

(Votes: 5)

Very less people said that they dont get stressed due to money issues.

It’s natural! Money is an important part of life and money-related stress is common. It takes huge control and an amazing mindset to not get disturbed due to that aspect. If you also get stressed about money issues, it’s natural and dont worry, just see that it does not hugely impact your well-being.

Superpower #9: I earn a very high income.

(Votes: 3)

Only three people reported feeling they possess this superpower.

The challenge with this superpower is that our perception of “very high income” is often relative to what we currently earn. For someone earning ₹10 lakhs a year, ₹25 lakhs might seem very high, while for someone earning ₹25 lakhs annually, ₹1 crore could feel like the benchmark for high income.

My guess is that many clients earn substantial incomes but struggle to recognize it as such because they constantly compare themselves to others who earn more.

However, if you have the superpower of earning a high income, I believe that about 75% of financial issues are effectively addressed. Most financial problems can be traced back to having a lower or limited income.

Superpower #10: Luckily, I am going to get a good amount of wealth in Legacy.

(Votes: 2)

Only two people indicated that they expect to receive a substantial inheritance.

Receiving a legacy can provide a significant financial cushion, offering opportunities for further investments or securing one’s financial future without having to earn everything independently.

However, many people come from middle-class families and are doing significantly better than their parents, making it unlikely that they will receive anything substantial from them. In some cases, inheritances are complicated, often consisting primarily of real estate, such as a family home, which must be divided among siblings.

Superpower #11: I don’t worry about the future.

(Votes: 1)

Everybody worries about the future.. some more some less.. hence no comments

However, this superpower reflects confidence in one’s financial planning and overall life trajectory, leading to peace of mind. Not being preoccupied with future concerns allows for a more enjoyable present. It indicates that an individual has taken proactive steps to secure their future, thereby reducing anxiety and enabling them to focus on other aspects of life.

I am curious to know who that one person is—we could all learn a lot from them!

Dear “1 crore” aspirant,

This is Nandish Desai from Jagoinvestor.com. If you’ve chosen to read this article, I assume you are serious about creating your first one crore. If you have already crossed the one-crore mark, this article can still provide insights for achieving your next financial milestone.

This article is written in a coaching format, drawing on my years of experience working closely with investors from all walks of life.

Our team has worked one-on-one with several thousand investors, and we’ve identified key aspects that explain why many people struggle to reach their first one crore.

The cheese (Rs. 1 crore) has moved for many 🙁

Getting cheese ( 1 crore) is EASY and hard at the same time.

We live in a world where it’s easy to be fit – gyms in every building, access to top dieticians and coaches, a wealth of information on health and fitness online, diet food delivery services, running clubs, and smartwatches to track your steps.

Yet, it’s just as easy to become unfit with binge-watching, food delivery apps, partying, smoking, and excessive drinking. Similarly, it’s easy to read a book, and equally easy not to. Forming good habits is just as accessible as forming unsupportive ones.

In the same way, creating your first one crore can be easy, but for many, it’s a challenging reality (referring to liquid money in equities, not real estate).

Many people struggle because their approach to accumulating wealth has become outdated, and they’re unaware that their “cheese” (ways to create one crore) has moved. Their habits around money might not be supporting their goal, or their overall approach to life may be hindering their ability to create their first one crore.

How did I create my first 1 crore?

There was a time in my life when nothing was working out. My income was unstable, I wasn’t investing regularly, and I had no focus on building my net worth. One crore seemed like an impossible goal. I felt like I was at ground zero, negative about life, and upset about many things.

One of my mentors came to my rescue and said, “If you are lying on the ground, you must use the ground to raise yourself. If you are negative, use those negativities to succeed in life.” His words struck hard, and I decided to restart my life’s journey. I realized I had nothing to lose and needed to dedicate myself to changing my financial situation.

It took a lot of time, effort, and failures to reach my first one crore. The question I kept asking myself was, “Nandish, is life predestined or a result of my self-effort?” This is a powerful question to ponder. If you believe life is predestined, you might feel helpless about achieving your first one crore. But if you believe your first one crore is a result of your self-effort, you can continue reading further.

10 pointers why it gets hard for people to create their first 1 crore

Below I want to share 10 reasons why most people are not able to create their first Rs 1 Cr and it gets hard for them to continue on their path of wealth creation.

#1 : Because what you believe may not be ALWAYS true

What you believe may or may not always be true. We all have our internal strategies for earning, saving, and investing, and as human beings, we tend to be very righteous about them.

Many people believe that only through real estate can they become rich, or only by doing business, or only by investing in gold. There are no right or wrong ways, but there are certainly newer and more effective ways.

You need to keep an open mind for new ideas and approaches. Being rigid in your beliefs about how to reach your first one crore can limit your potential. Understand that there can be a thousand more ways than what you currently believe to help you achieve your goal.

If you choose to be fixed in your thinking, you’ll miss out on new possibilities. People who grow faster in life are open to new possibilities, they are coachable, and they are not overly attached to their personal strategies for reaching their goals.

#2 : Low SAY-DO Ratio

Many investors begin their journey with the intention of never redeeming their investments until they reach their financial goals or target wealth. However, data from AMFI reveals that more than 50% of investors stop their SIPs within the first two years.

This discrepancy between what is said (X) and what is done (Y) with their money highlights a low say-do ratio.

To build your first one crore, you need to maintain a high say-do ratio. Trust me, no platform or YouTube video will stress the importance of this principle as much as it deserves. Ensure that you make strong financial commitments and learn to keep them, no matter what.

A high say-do ratio is crucial for achieving your financial goals.

#3 : Your Blood Cells Are Not Yet Enrolled in Creating 1 Crore

When you examine the life stories of champions, you’ll see that their entire being is committed to their goals. Most people wish or hope to create 1 crore, but their commitment isn’t fully internalized. Remember, your self-effort shapes your financial future.

It’s crucial that you fully embrace the goal of creating 1 crore, committing every part of yourself to this future. This commitment is not just about external actions but an inner game, an inner calling, and an inner commitment to yourself.

#4 : Poor Relationship with Your Own Rhythm

Everyone has a unique financial journey because we each have a different rhythm. It’s important to respect your personal pace on the path to creating your first 1 crore. You’ll understand rhythm when you listen to music or go for a run.

I realized the importance of rhythm while learning guitar from my music coach, Nishant, and also while running. You need to identify, acknowledge, and respect your pace in achieving your financial goals.

I recently heard from a friend in Mumbai about how she helped someone from a slum create his first crore through small savings and significant efforts.

Despite starting from different backgrounds and job profiles, everyone has their own rhythm. Don’t worry if your pace is slow; what matters is that you are actively working towards your first 1 crore, taking shots on goal.

#5 : Most People Forget to Bounce Back

Many people begin their SIP or monthly investment journey due to a breakdown in their career, health, or other uncontrollable situations. It’s perfectly fine to pause investments temporarily, but most people forget to bounce back.

Just like it’s hard to maintain consistency in the gym during the first year, the same applies to investing. Excuses (even valid ones) can derail your efforts. In the journey of compounding, breakdowns are inevitable, but it’s crucial to bounce back.

Many of our clients restart their SIP journey or reinvest after redeeming their money, demonstrating resilience and commitment.

#6 : You Need to Have a Thick Face

Having a “thick face” means building a shield against those who doubt your wealth creation goals. People around you may always doubt your ability to create massive wealth. Your thick face is your shield that prevents these doubts from affecting you.

Be clear about what you want to achieve, your goals, and your next milestones. Keep taking massive actions in your financial life. Remember, your only access to your first 1 crore is through consistent action and nothing else.

#7 : Fear Is Your Best Friend

The 13th-century Hindu philosopher, Shankaracharya, mentioned that even the greatest warrior, when standing in the midst of battle, sweats with fear.

You will face a lot of fear before and even after creating your first crore. Fear is a constant companion, and there’s no escaping it. Markets will have corrections, scams will happen, companies will fail, financial crises will hit, and wars will continue.

Despite all this noise and news, you must stay consistent on your path to creating your first crore. These events are tests of your commitment to wealth creation. Are you truly interested in wealth creation, or is it just a casual dream?

#8 : Lack of Self-Inquiry

Lao Tzu, in Tao Te Ching, says,

“Conquering others requires force; conquering oneself requires strength.”

Without self-inquiry, progress is impossible. It’s not just about accumulating one crore; it’s about conquering something within yourself that you may not currently see. You are not the first to aim for one crore, ten crore, or even one hundred crore.

Many have done it before, and the key lies in self-inquiry. It may seem spiritual, but it’s essential to elevate your wealth creation game.

Spend time alone, perhaps on a beach, with a blank sheet of paper, and capture the thoughts that come to mind. This process is about discovering your own strengths and new ways to succeed in wealth creation and life.

I often take such breaks for self-reflection, and this article is a result of my self-inquiry. Share this article with others who might benefit from it, and become a partner in helping individuals create their first crore.

#9 : Kill the Chicken

We all remember the story of the chicken that laid golden eggs. Out of greed, the owner killed the chicken, ending his supply of golden eggs. While it was presented as a story of greed, it’s actually a lesson in financial freedom.

The chicken represents your corpus, and the eggs represent the interest you earn for the rest of your life.

Many people start investing and build up a few lakhs (the chicken in the making). Then, an enticing expense arises, and they kill the chicken by redeeming all their accumulated money. This is a major reason why most people don’t reach their first crore.

They have the ability, knowledge, and money to create the corpus, but they redeem their investments for various reasons, leaving the goal unfulfilled. Check the redemption data of all mutual funds, and you’ll find that most redemptions are not genuine and often harm the investor’s wealth creation journey.

#10 : Not Maintaining a Journal: Experiences Worth One Crore Hit Us Every Day

I learned about journaling from the legendary motivational speaker Jim Rohn, whose words had a lasting impact on me.

My brother and I discovered journaling through one of his YouTube videos. Journaling is powerful and can surely help you achieve your first crore or any significant goal. Every day, your actions lead to experiences, and capturing them allows you to learn from them.

Every day, new ideas that can help you reach your goals will come to you, but if you don’t capture them, you miss out. Journaling might seem outdated or old-fashioned, but it can be a crucial tool in your wealth-creation journey.

How it feels when you reach Rs 1 Cr mark?

We always congratulate our clients when they reach their Rs 1 Cr mark after years of hard work and dedicated investments and its always very satisfying to read what they think about this milestone. I would love to share a snippet of what they said after achieving this milestone!

Testimonial #1

Testimonial #2

Conclusion

Your first crore is your game, and we are here to help and encourage you to play it.

If you want our team to help you design your first crore game, we would be delighted to have you on our client list. We will share how you can fine-tune your wealth creation game. Many of our clients are playing for portfolios of 50 or 100 crore.

Asking for external help is a sign of strength, and we are ready to pour our experience and expertise into your financial life.

Contact Jagoinvestor Team for Wealth Creation Services

Don’t forget to share your experience of reading this article, and share something from your life that could help someone else create their first crore.