'Most underrated investment': It won’t 10x but this asset beats equity for top earners, says finfluencer
Another key insight: increasing employee PF contributions automatically boosts the employer match—"You can't selectively boost just one side. Both move together."
- Oct 8, 2025,
- Updated Oct 8, 2025 7:54 AM IST
Provident Fund (PF) may not be flashy, but for high-income earners, it beats equity more often than not—especially after taxes, says finfluencer Sharan Hegde, in a X thread breaking down why maxing out PF contributions is one of the smartest debt moves you can make.
Hegde, known for simplifying personal finance for young professionals, compared two hypothetical earners with ₹1 lakh monthly basic salaries—one choosing to max out PF contributions, the other opting for post-tax equity investing.
“YOU” (max PF route) contributes ₹12,000 monthly, matched by a ₹12,000 employer contribution—both tax-free—adding up to ₹24,000 in risk-free monthly investments.
“FRIEND” (equity route) invests ₹20,256 a month post 30% tax, needing 12% annual returns just to match PF’s performance. After five years, the PF investor ends up with ₹17.75 lakh (tax-free), while the equity investor nets ₹16.13 lakh after capital gains tax.
“Not many assets consistently beat these risk-free returns,” Hegde noted, adding that equity must generate 16% CAGR over 5 years just to outperform PF. That breakeven CAGR drops only marginally over longer durations—10.35% for 20 years.
He clarified this strategy works best if you're in the 30% tax bracket, don’t need liquidity soon, and prefer guaranteed debt returns. For those in lower brackets, the tax benefits are less compelling: “Contribute bare minimum to PF—keep cash in hand.”
Another key insight: increasing employee PF contributions automatically boosts the employer match—"You can't selectively boost just one side. Both move together."
While PF won't deliver explosive returns, Hegde said it's “probably the most underrated debt investment for high earners right now.” The understated asset class, he argued, offers a moving target of tax efficiency and inflation-beating, risk-free returns.
Provident Fund (PF) may not be flashy, but for high-income earners, it beats equity more often than not—especially after taxes, says finfluencer Sharan Hegde, in a X thread breaking down why maxing out PF contributions is one of the smartest debt moves you can make.
Hegde, known for simplifying personal finance for young professionals, compared two hypothetical earners with ₹1 lakh monthly basic salaries—one choosing to max out PF contributions, the other opting for post-tax equity investing.
“YOU” (max PF route) contributes ₹12,000 monthly, matched by a ₹12,000 employer contribution—both tax-free—adding up to ₹24,000 in risk-free monthly investments.
“FRIEND” (equity route) invests ₹20,256 a month post 30% tax, needing 12% annual returns just to match PF’s performance. After five years, the PF investor ends up with ₹17.75 lakh (tax-free), while the equity investor nets ₹16.13 lakh after capital gains tax.
“Not many assets consistently beat these risk-free returns,” Hegde noted, adding that equity must generate 16% CAGR over 5 years just to outperform PF. That breakeven CAGR drops only marginally over longer durations—10.35% for 20 years.
He clarified this strategy works best if you're in the 30% tax bracket, don’t need liquidity soon, and prefer guaranteed debt returns. For those in lower brackets, the tax benefits are less compelling: “Contribute bare minimum to PF—keep cash in hand.”
Another key insight: increasing employee PF contributions automatically boosts the employer match—"You can't selectively boost just one side. Both move together."
While PF won't deliver explosive returns, Hegde said it's “probably the most underrated debt investment for high earners right now.” The understated asset class, he argued, offers a moving target of tax efficiency and inflation-beating, risk-free returns.