Good one. Sherin here and today we are disusing about creating a magical investment portfolio that is highly suitable for low income or standard people with low salary or income. Before reading, you must keep in mind that, this is for very long term investors who want to build enormous wealth for long time but have very little money in hand. Read more...
How I Create Similar One for me?
Most people thinking that investing required lots of money in hand. In my words and experience, this is absolutely nonsense. Time changed and people can invest ery little money in different instruments regularly without getting any pain. Here is how I prepared one for my child.
First, I have decided only 10 stocks required in my kids portfolio. I preferred only monopoly and highly profitable sector leaders to buy. One of the important points here to keep in mind that, the company face value must be 10. You will later know why this.
The Importance of Face value
Most people not aware about this point. That is the reason I mentioned this topic is less known, less discussed or not easy to find in Google.
Scenario: You have a stock of a well known company with a facface value, of 10 and and having a monopoly product or business. If it is in India, you can consider BSE (Bombay Stock Exchange) stock couple of years back, you never believe the alue of the stock now.
1. Face value is the meter to calculate dividends.
2. If stock splits 1:10 (means the face value of 10 comes to 1, the number of 10 stocks in your hand will go to 100) Remember, the price also reduce proportionally and that is the reason I told to prefer only monopoly stocks.
3. Reduced price help investors to buy that stocks.
4. Because of monopoly the price of the stock will again increase fast.
Like this, if you have 10 stocks with face value of 10, you may surprise later by seeing the capital growth.
This is how the magic of investment growth and best for children to create their portfolio for long term.
