When I first heard about Rakesh Jhunjhunwala and his unbelievable story of making 15K crore from capital of just Rs. 5,000, I was unable to believe it. How can a middle class man who started his first investment with Rs. 5,000 can come under the list of Top 50 Richest person in India. The most surprising was, his name was also in the Forbes list of Richest Person in the world. People call him Indian Warrren Buffett. According to Forbes 2010 ratings, Rakesh Jhunjhunwala net worth was $1 billion. Within the time interval of 30 years, Rakesh Jhunjhunwala made 15K crore from just Rs. 5,000.
People say “It is not easy to make money from stock market, but I think it was just a child’s play for Rakesh Jhunjhunwala”. Well the question arises here, how Jhunjhunwala become a billionaire from a middle class man. How a son of an Income tax officer is able to multiply his wealth manifolds? Well, he was also a human being just like you and me but the question is what he did that Rakesh JhunJhunwala made 15K crore and we didn’t.
Rakesh JhunJhunwala made 15K Crore with just Rs. 5,000 – A Success Story
Rakesh Jhunjhunwala, a common middle class man who was born on July 5th, 1960 in Mumbai. His father was a Income tax officer and an investor in the market.
Just like us, he has dreams of becoming a pilot or a journalist. But ‘this world is just a stage and we are puppet, destiny holds all the strings’. He was first introduced to the stock market by his father. Well, from childhood only he was very much keen on learning about stock market. Once he also asked his father ‘what is the cost of fluctuations in market’. His father answered ‘the reason is the flow of news’. Day by day he got quite fascinated by the stock market and ultimately decide to make a career in stock market.
Before throwing himself in the stock market he did graduation in Commerce from Sydenham College and become the Chartered Accountant in year 1984. After completion of CA, he ask his father that he want to become an investor in stock market. This was a bold decision as at that time, after becoming CA, such type of step is considered very unorthodox. His father though accept his decision but made it clear to him that he won’t be giving him any money for it.
The year 1985 was the year when Rakesh Jhunjhunwala made his entry in the streets of Bombay Stock Exchange with mere capital of Rs. 5,000. This was very small amount so he approached his brother and was able to manage 1.5 million. With this money he was able to earn 1 million. He invested this money in 5000 shares of Tata Power. In initial years he did not trade or made any speculation. But then he realizes that the only way of increasing the income is through trading and speculation. He started trading and even make profit through Tata Power, Sesa Goa and Telco. This was the time when his net worth was 15 million. So starts trading of stock and started making money again and again.
Rakesh JhunJhunwala Principles for Trading
- One should know what and how much to risk.
- Know when and how to take a loss.
- One need to have control on his or her emotions.
- Lots of patience and discipline.
- Be realistic.
- Trading is full time profession not a part time job or passion.
- Never try to become the stock market master. Behave like a slave.
- Always leverage your skills not your money.
- One should have a broad idea of direction. Make trend your friend.
- Do not fear of making mistakes. But make a mistake that you can afford and love to commit again.
- No one can taught you trading. It is learnt from experiences.
Also Read >>> Secret to Warren Buffet Investing Success – CashStock
Rakesh JhunJhunwala Secret on Investments
- The most important quality to get success in investing is to have an optimistic outlook.
- Expect realistic return. Do not make castles in the air and avoid two emotions – fear and greed.
- Always try to see a large picture.
- Always remember one word – RISK.
- Be disciplined.
- Don’t be rigid when it comes to investing. Be flexible.
- Though it is important what you buy, but more important is at what price your buy it.
- Your exit should be independent decision not based on profit or loss.
So these were the ‘mantras’ or you can say the principle on the basis of which Rakesh JhunJhunwala based his decision and became a billionaire. Try to apply them, you never know when you become next billionaire from stock market.