Indians love Gold and Real Estate. But when it comes to creating generational wealth, do these traditional assets hold up against the Stock Market? Let's analyze the data.
Asset Class Showdown
| Asset Class | Avg Returns (20 Yrs) | Liquidity | Ticket Size |
|---|---|---|---|
| Equity (Stocks/MFs) | ~12-15% | High | Very Low (₹500+) |
| Real Estate | ~8-10% (Location specific) | Low | High (Lakhs/Crores) |
| Gold | ~8-9% | High | Medium |
| Fixed Deposit | ~6-7% | High | Low |
Equity: The Wealth Engine
Equity has consistently outperformed all other asset classes over long periods (15-20 years). While it is volatile in the short term, it is the only asset class that allows you to participate in the growth of the economy and corporate profits.
Real Estate: The Illiquidity Trap
Real estate requires huge capital, regular maintenance, and is very hard to sell quickly in emergencies. While it offers emotional security, its returns often fail to beat equity significantly when adjusted for maintenance and taxes.
Gold: The Hedge
Gold is an excellent hedge against inflation and uncertainty, but it is not a primary wealth-creation tool. It preserves value but rarely multiplies it exponentially like businesses (stocks) do.