Einstein once said ‘ Compound interest is the eight wonder of the world. He who understands it, earns it. He who doesn’t , pays it. If you buy stock of good business, it will make you rich.
Let’s take an example to clear things up, you had 5 lakhs in your bank account or raised it from friends, family or any other source in the year 2015. I’m sure one can have big plans when it comes to spending their money. But if you had invested in good company like ‘Pidilite Industries’ which is famous for brand ‘fevicol’, fevi kwik , M-Seal etc. Price of each share was 550, you could have bought 909 number of shares, 550*909=5 lakhs approx.
Now in 2020, the share price is around 1500. So make calculations 909*1500= 13.6 lakhs approx. When you remove initial investment, you made shear profit of 8.6 lakhs. So, do these kind of calculations with big companies which you are aware of, see the results for your self. Smart minds identified the companies which are never going to go down and invested when many company’s (not this one though) share price was just around 10, 15 or 50 rs , presently value of each shares runs into thousands. This way they became super wealthy.