Roti, Kapda, Equity & Makaan

No. I am not asking you to invest in companies that sell Roti (Food), Kapda (Clothes) and Makaan (Housing). Though it would be very interesting to look at businesses and stocks of such companies.

By the way, if you are not familiar with the 1st, 2nd and 4th terms in the title of this post, then here is some help:

These three words are Hindi equivalents of Food, Clothing and Shelter. The basic human needs.

Please note that these are basic needs. These are generally considered to be mandatory and not optional.

Investing Necessary Young Generation

Now I am sure we all are quite clear about needs and desires.

If you have any doubt, then stop reading this post. Close your eyes and think.

What exactly are the things you need?

What exactly are the things you desire?

Can you live without the things you need?

Can you live without the things you desire?

An example might help here. You need food to survive. You cannot live without it. So food is your need. Now a new iPhone 6 is something that you want. You would be very happy to have it. But you won’t die if you don’t get it. It’s a desire. It’s a good-to-have thing. But not as necessary as one of your needs.

Now talking of needs, if you are only looking to fulfill your basic needs, then there is not much to look forward to in your life.

Earn. Spend (on food, clothing and shelter). Repeat.

That’s it.

It is as simple and as dull as that. A dull SIP in a proven Mutual Fund is very good for your wealth. But a dull life is not good. Mind you, by using the word ‘dull’, I am in no way trying to mean ‘Simple’ or ‘Frugal’.

As humans, we will always have desires that make life slightly more interesting than just Earning, Spending (on basic needs), Repeating.

And investing, if done intelligently, can help improve your lifestyle. Read a post I did on the same topic sometime back as to how investing can help upgrade your lifestyle and you will know.

I know I am sounding too gyan-giving to many people right now.

But believe me….I also know that there are many (or rather majority) who have trouble even managing their 3 basic needs, leave alone desires.

I know parents who have sacrificed all they ever accumulated on education of their children.

There is absolutely no denying the fact that if one is able to even fulfill all the basic needs, then he or she is successful in life. Money and wealth are secondary. Life is much more than just about accumulating money.

But honestly speaking, we cannot deny the existence of our desires and wants. Once again I say: Needs are not optional. But Desires are optional. But we all want to have something more from life. We all want to fulfill our desires, once we are done with our needs. If not all, then atleast the ones which are well justified. Isn’t it?

My apologies….I am once again going into my Monk-Mode 🙂

Side-Note: Pardon my blabbering in this post. But I had to share these thoughts with you all as I think it is quite important for those who still don’t realize it.

But now lets come back to reality…

With lifestyles becoming increasingly complex, it is becoming very tough for people to fulfill all their wishes.

Add to it the fact that most people have been financially groomed by their parents – who (atleast a majority of them) did not really understand the power of compounding and how inflation eats up your wealth. And out of those who did understand it, very few communicated it clearly to their children, i.e. our generation.

The combined effect of all this is that we now have a situation, where our generation only gets excited about making money when it seems easy to do it (Bull Markets).

And they shun away equity as soon as markets start to fall. And this is the biggest mistake, which anyone planning to become rich is making.

These people are somehow, able to get their market timings PERFECTLY wrong!

Now let me get this straight…

Once your basic needs are taken care off (and mind you it won’t be easy), only then can you think about taking care of your desires. Right?

But most of the times, the money you earn will almost never be sufficient to fund both your needs and desires. And that is where you need an asset class, where you can put your money and be almost 100% sure that it will beat inflation.

Yes. And as you have rightly guessed, this asset class is the 3rd word in the title of this post. EQUITY.

And I have intentionally put it in the third place before the word ‘Housing’. To know why, you need to read an article I co-authored with Ajay – Comparison of Investing in Real Estate and Mutual Funds.

Equity should be considered as the basic need in current times, to fund a better future and life – And sooner you realize this, better it is for you.

I can share with you numerous examples about why equity is your best bet going forward. But it is upto you to be convinced about it….

Atleast for our generation, equity is the basic need now.

You need to invest in equity. And you need to do it now. I am not talking about the short term. And don’t take this as an indication that it is a good time to invest in markets due to recent 10% to 15% correction. What I mean to say is that if you are young and still haven’t done it, then you need to start investing in equities.

Take the mutual fund route to start it. Don’t wait to become an expert investor. Just start it.

Don’t wait to pay off your education loans or home loans completely. Keep paying back your loans and also invest simultaneously. It is tough. But if you think about it and can curb your desires a little bit in short term, you can do it.

Think about it.


If you think this post can help convince those who are yet to be convinced, then please share it with them. I will be glad if this post reaches those who don’t visit Stable Investor regularly.


  1. Hey dev,
    Beautiful article.i know the importance of equity but isn't it wise to invest in stocks directly rather than mutual funds?
    I would appreciate if you could write an article on mutual funds vs stocks.

  2. Hi Dev. Very well put. In fact I tell many young people that equities are the SAFEST investment option, provided one understands what investment means and what long-term implies, and provided one has realistic expectations (very important). Equity is the only investment option which has higher probability of high returns and beating inflation, and very low chances of permanent capital loss at a portfolio level. Individual stocks may go kaput mind you.

    I have been into equities for more than 10 years and my dad 30 years with very concentrated portfolios. Personally I am 100% invested, and my average holding is 5+ years. I buy no other products except maybe NSC's for tax saving. My long term IRR has been 16% + (increasing) dividends and I am quite satisfied. But many want to double or triple their money in months or years, which is clearly foolish and unsustainable on a long term basis.

    IMHO, at least a decade of putting money in stocks and then allowing compounding to do its job is investing. Anything less than that is NOT investing. But it isn't easy. A lot of hard work, lot of reading, combing through annual reports, a lot of analysis / scenario modeling and the conviction to put ALL your money in stocks. Or index funds at worst.

    But you are right, there is no alternative to equity.

    Subhodeep Mukhopadhyay

  3. Hi Brad

    Investing in individual stocks, atleast for most people is tough. And I say this because there are so many variables involved in stock analysis which might be tough for common people to get hold of. And stock investing is not just about analysis but also about mental temperament and discipline.

    Mutual funds on other hand help achieve diversification and low-cost utilisation of fund manger's expertise.

    But I guess there is so much to write on this topic that I seriously need to do a post on the topic which you have suggested. Thanks for the idea Brad

  4. I really like the statement which you made Subhodeep – 'Equities are the SAFEST investment options' – provided one understand the real meaning of investing, inflation, compounding and more importantly, time horizons. 🙂

    It is slightly debatable – but only for those who don't really understand the real meaning of the statement.

    Beautifully put Subhodeep!!

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