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Drawing a six-figure salary is everyone’s dream. But some people are more ambitious. They want a six-figure return on their investments alone.
• A six-figure return on investments is pretty much possible. It depends on a single question: how much is the return that asset class is generating? The amount needed to invest to rake in a six-figure income every year, has an inverse relationship return associated with that asset class. The lesser the return generated, the more the investment needed.
• In market analysis, usually behavioural science has long been ignored. However, the biggest driver of the markets, historically, has been the behaviour of the investor. And the same comes into picture here as well. Risk averseness, which is a very personal kind of trait in an investor, is inversely related to the investment needed to generate six-figure returns.
• The greater the risk, the greater the returns. One of the most high-return debt instruments in any market are junk bonds (the ones that have been D-rated). But with high returns, there is a very high probability that the money would be lost.
• The best example of how risk hits you hard is – India’s Franklin Templeton debt fund fiasco last year. The fund manager was forced to close six of its high-risk, high-return schemes as redemption from the investors surged.
