When it comes to financial planning, aligning your investments with your life goals is critical. Whether you’re saving for a dream home, retirement, or other milestones, choosing the right asset class can make all the difference. While real estate has long been considered a cornerstone of wealth creation, recent data suggests that other investment avenues may offer better returns, liquidity, and risk-adjusted efficiency.
Let’s explore this through a real-world example and compare it with other financial instruments.
The Gauri Khan Real Estate Example
Recently, Gauri Khan, wife of Bollywood superstar Shah Rukh Khan, sold her Mumbai flat for ₹11.61 crore. This sale generated a profit of ₹3.11 crore over 2.5 years—a 37% absolute return. While this sounds impressive, the Compounded Annual Growth Rate (CAGR) tells a more nuanced story: 12.39% per annum.
Now, let’s compare this with returns from various mutual fund categories over the same period (August 2022 to April 2025):
Comparison of Returns: Real Estate vs Mutual Funds
| Investment Option | Category | Profit (₹) | CAGR (%) | Absolute Return (%) |
|---|---|---|---|---|
| HDFC Flexi Cap Gr | Equity: Flexi Cap | ₹6.39 crore | 23.40% | 75.16% |
| ICICI Pru Equity & Debt Gr | Hybrid: Aggressive | ₹5.35 crore | 20.09% | 62.92% |
| Nippon India Multi Asset Allocation Fund Gr | Hybrid: Multi Asset Allocation | ₹4.85 crore | 18.45% | 57.03% |
| Motilal Oswal Nifty 500 Index Fund Gr | Index Fund | ₹3.70 crore | 14.53% | 43.56% |
| Gauri Khan’s Flat Sale | Real Estate | ₹3.11 crore | 12.39% | 36.59% |
Key Insights
1️⃣ Higher Risk-Adjusted Returns
While real estate delivered a respectable CAGR of 12.39%, equity funds like HDFC Flexi Cap achieved nearly double that at 23.4% CAGR, and even hybrid funds like ICICI Pru Equity & Debt provided 20.09% CAGR—outperforming real estate significantly.
2️⃣ Liquidity Matters
Real estate investments often lack liquidity and require time-consuming processes to sell or access funds. In contrast, mutual funds offer far greater liquidity, allowing you to redeem your investments quickly when you need cash.
3️⃣ Diversification Benefits
Hybrid funds like Nippon India Multi Asset Allocation provide exposure to multiple asset classes (equity, debt, gold), offering balanced returns with lower risk compared to single-asset investments like real estate.
4️⃣ Accessibility and Flexibility
Financial instruments such as mutual funds allow you to start small and scale up your investments over time—something that’s not as feasible with high-ticket assets like real estate.
The Bigger Picture: Aligning Investments with Goals
While real estate can be a valuable asset in your portfolio, its limitations in terms of liquidity and moderate returns make it less efficient compared to diversified financial instruments for many financial goals.
For instance:
- If your goal is wealth creation, equity funds may provide higher returns over the long term.
- If you prioritize stability and balanced growth, hybrid funds are an excellent option.
- If you need liquidity and flexibility, short term debt funds & arbitrage funds could be more suitable
The key is to align your investment choices with your objectives while factoring in risk tolerance, time horizon, and liquidity needs.
Final Thoughts
Gauri Khan’s flat sale reminds us that not all “big profits” are as lucrative as they seem when viewed through the lens of annualized returns and opportunity costs. Objective-based financial planning is about making informed decisions that maximize returns while ensuring access to funds when you need them most.
So before you invest in any asset class—be it real estate, equity funds, or hybrid funds—ask yourself:
👉 Does this investment align with my financial goals?
👉 Does it provide the liquidity I might need in the future?
👉 Am I maximizing my risk-adjusted returns?
By answering these questions and planning strategically, you can ensure that your money works harder for you—helping you achieve your dreams without unnecessary compromises.
Ready to Plan Smarter?
If you’d like help aligning your investments with your goals or exploring smarter ways to build wealth, feel free to reach out! Let’s make your money work for you. 💼💡
