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A man got lost in a desert & the water in his flask had also run out. He knew he will not survive if he didn’t find water soon. Just then he saw an unoccupied hut. He saw a water pump in the hut but no water came out, so he gave up in frustration. He then saw a bottle of water & was about to drink it, when he saw a note on it. It read, “Use this water to start the pump. Don’t forget to fill the bottle again, when you are done.” The man was in a dilemma if he should follow instructions or ignore & drink the water. If false, then pouring water in the pump would be like throwing away the last chance to survive. He took a leap of faith & poured water into the pump. He heard a gurgling sound & water came gushing out. He drank to his fill, got refreshed, filled his flask & also the bottle. Before leaving, he added his own note on the bottle: “Believe me, it works.”

In the story, the man knew it was risky, but he took the leap of faith. While investing too, we have a choice to invest as per our risk appetite. If we choose risk free assets, we may not be able to create wealth or meet some key goals including post retirement cash flows. Investing in relatively riskier assets like equity can help to meet goals as well as create wealth owing to their potential to generate higher returns. However, returns from equity are uncertain. We can only go by history that wealth creation has happened by investing regularly over long periods of time. No one knows how much returns we will receive nor after how long we will receive. The bigger risk is the market underperforming in some cycles. Hence, we must take a leap of faith in equities & keep investing as per our risk appetite to create wealth. Maybe one day, you too will say, ‘Believe me, it works.’