When it comes to building wealth and money talks, every expert repeats the same mantra: stay invested for the long term. But what exactly does “long term” mean and more importantly, what does it actually deliver? In most cases, we are talking about holding an investment for at least 5–10 years, sometimes even two decades, giving your money enough time to ride out market swings and harness the power of compounding.
According to FundsIndia’s Wealth Conversations – June 2025 Edition, Indian equities have been the real wealth creators. Over a 20-year horizon, ₹1 lakh invested in equities grew to ₹15.2 lakh. Gold, long considered a safe haven, wasn’t far behind at ₹15.5 lakh. Real estate, however, lagged dramatically, delivering just ₹4.4 lakh in the same period.
So, should you bet on the shine of gold or the solidity of brick and mortar? The choice depends on your financial goals, liquidity needs, and time horizon.
Gold, today, is glittering at record highs, thanks to global uncertainties and its age-old status as a hedge against inflation. The rise of digital gold and ETFs has also made it more accessible to everyday investors.
Real estate, by contrast, offers long-term capital appreciation, rental income, and the comfort of being a tangible asset, though it demands a much heavier upfront investment. For many, it doubles up as both an investment and a utility.
At the end of the day, the right choice is not about chasing returns alone but about aligning with your financial goals, risk appetite, and staying power.
Five Key Factors to Decide Wisely
1. Investment Horizon
Gold works best for short-term goals. It acts as a hedge against inflation and is far more liquid than real estate. Instruments like Sovereign Gold Bonds (SGBs) not only provide capital appreciation but also pay annual interest.
Real estate, backed by home loans, plays the long game. It can generate rental income and appreciate over decades. RBI guidelines ensure that home loans are offered on favorable terms by banks and NBFCs, with amounts ranging from ₹10 lakh to ₹25 lakh or higher depending on creditworthiness and repayment capacity. For exact terms, it’s always best to check with your lender.
2. Liquidity and Flexibility
Gold is easy to buy, sell, or trade, especially now with digital gold and SGBs listed on stock exchanges. On this front, gold is the clear winner.
Real estate, though attractive, struggles with liquidity. Selling a property takes time, involves hefty transaction costs, and comes with regulatory checks like RBI’s strict Loan-to-Value (LTV) ratios.
3. Affordability and Scalability
Gold scores high on affordability. You can start small – even with a gram – making it ideal for new or mid-level investors.
Real estate, by contrast, requires deep commitment: down payment, registration, EMIs, and maintenance. It works best for those with long-term financial stability and steady income.
4. Tax Benefits and Implications
This is where real estate has an edge. Home loans provide tax deductions under Section 80C (principal) and Section 24(b) (interest).
Gold lacks such deductions, though capital gains on SGBs are tax-exempt upon redemption for individual investors.
5. Returns and Growth Potential
Gold has historically delivered strong returns and remains a solid inflation hedge. With SGBs offering extra interest, the effective yield only improves.
Real estate, meanwhile, offers the twin benefits of rental income and long-term appreciation. Thanks to SEBI reforms, investors can now also explore REITs (Real Estate Investment Trusts), which make property investment more accessible and liquid.
Stock Market, The Most Reliable, Despite the Volatility
For many investors, the stock market still feels intimidating, headlines about crashes and volatility can easily trigger panic. But history shows that patience pays. Over the past 20 years, Nifty 50 TRI delivered 14.6% annualized returns, turning ₹1 lakh into ₹15.2 lakh. Midcap and small-cap indices performed even better, midcaps, for instance, grew wealth 25.3 times.
Under the lens
Gold: Stable, Safe, but Limited Growth: In India, gold is more than jewellery, it’s a trusted store of value. Over the past 20 years, it has delivered an impressive average annual return of 14.7%, multiplying wealth 15.5 times. But here’s the catch: gold’s growth is often event-driven. Global crises like the Covid pandemic or the Russia–Ukraine war caused sudden spikes, but those bursts rarely translate into long-term, steady wealth creation. In short, gold is a great protector but not always a great multiplier.
Real Estate: Dream Home, But Slow Returns: Owning a home remains every Indian’s aspiration. Yet as an investment, real estate has lost much of its shine. Over the last two decades, property delivered just 7.7% annually, turning ₹1 lakh into only ₹4.4 lakh. That’s far behind both gold and equities, and often even behind inflation. Simply put, while real estate offers utility and emotional value, it’s no longer the go-to vehicle for wealth building.
Where Did the Money Really Grow?
- Equities: Wealth doubled in 6–7 years, tripled in 10–11 years, and grew 15.2 times in 20 years.
- Gold: Kept pace at 15.5 times in 20 years, though with a bumpy ride.
- Real Estate: Lagged badly, growing just 4.4 times in 20 years.
The verdict – Patience + the right asset class = real wealth.
