“Life is like a box of chocolates and you never know what you’re gonna get” 

Tom Hanks said these magical words in the 1994 classic Forrest Gump.

Around the same time, thousands of miles away I was growing up in Western Uttar Pradesh and the boxes in my life were also full of surprises. And one of those days, in my Uncle’s house – I saw it for the first time. A gun. A Smith and Wesson pistol to be precise that Khatana Uncle was holding. I did not understand much but I understood that it was important, it was expensive, and it was an asset that Khatana uncle liked.

Close to 3 decades later, I landed up at Khatana uncle’s house again post Diwali. He is now enjoying his retired life with a garden in the front yard which is the envy of almost everyone in the secluded colony. Hell! Even I am jealous of the quaint little place that he has built for himself. Like most other relatives, he was slightly concerned but mostly curious about my new job. More so because I have moved from a recognizable brand like Kotak to something which seems like a wrong spelling of an animal that is rarely seen in India. The conversation that we had, which is given below, reminded me how all of us think differently about money and the power of compounding is hard to grasp.

Khatana Uncle: So, what exactly does altGraaf.com do?

Me: We are into alternative investments.

Khatana Uncle: What do you mean by ‘alternative investments’?

Me: Most people in India invest in traditional low risk assets like Gold, Bank FDs and real estate. A few people go in for high risk assets like stock market as well. What we do, is to find other assets which are higher in returns than FDs but lower in risk when compared to the stock market.

Khatana Uncle: Oh! So like pistols?

The confusion on my face was pretty evident as he smiled a bit and went on.

Khatana Uncle: I don’t know if you remember but I used to have a Smith and Wesson pistol when you were a kid. I had purchased it for Rs. 10,000 around the time you were born and sold it for Rs. 8 lakhs in 2012 when Komal (his daughter) was getting married. That’s a pretty good return.

Me: Well yes. It definitely is. But would you do it again? Recommend others to do it?

Khatana Uncle: No. Not at all. Because it had a bunch of issues with license renewal & safe-keeping. It wasn’t exactly easy to sell. To find the right guy, get the payment – there were problems. I wish there was a easier way for stuff like this.

Me: That’s exactly what I am building at altGraaf

Khatana Uncle: So, you will be selling guns?

The type of products necessary for wealth creation and also gives an edge to the portfolio with diversification are now easily accessible! Learn more about why one should invest in alternative asset classes here.

Me: No. Not even close. But we are going to sell assets which can give you similar sort of returns without the hassle of owning items.

Khatana Uncle: But what about the risks?

Me: Well, yes. The risks are there. But definitely lesser than the risks with a pistol or even investing in the stock market. Also, most of our assets are not for 25 years but for few months to 3 years.

And then Aunty came in with tea and soan papdi. I have a feeling it is the same one that I had dropped at Handa Uncle’s house couple of days ago. But hey – I don’t mind. It tasted delicious.

When I came back home, I sat down with an excel to roughly approximate the returns on the Smith and Wesson and if we at altGraaf are actually able to offer something similar or not.

So, here are the numbers.

I am assuming Rs. 10,000 was invested in 1981 and trying to find out the value in 2012

At 10%, it would become Rs. 1.91 Lakhs

At 12%, it would become Rs. 3.36 Lakhs

At 15%, it would become Rs. 7.61 Lakhs, which is around the amount Khatana Uncle got for the pistol.

At the end of these calculations, I was a bit surprised and happy as well. Surprised because a difference of few percentage points can make a big difference to the corpus in the long run. I know about the power of compounding but every time I see the numbers, it never ceases to surprise me.

And happy, because we at altGraaf.com do provide similar returns (approx. 15%) on our assets. However, our assets are restricted to financial products as of now. Maybe, someday we will offer investments in guns as well. Maybe, someday I will build a quaint little kitchen garden of my own.

To end with another quote from another 1994 movie Shawshank Redemption,

“Hope is a good thing, maybe the best of things”