Wealth can be defined as the ownership of assets that have been accumulated over time. These assets may be tangible or hard assets, such as real estate or gold, or intangible, such as mutual fund investments, equity investments, fixed deposits, corporate bonds, and other similar financial instruments. Wealth creation is a gradual process, with the exception of those who inherit wealth.
Creation of assets, which is wealth requires savings, and if is dictated by specific goals, the motivation to stay the course will be high. Goals can be short-term, medium-term, or long-term in nature. For example, building a corpus to fund your child's university fees ten years from now is a medium-term goal, while saving for a car is a short-term goal. Building a retirement corpus, which is decades away, is a long-term goal. Creation of a corpus for each of these goals requires a different investment mix to achieve the desired outcome.
The factors that will determine successful wealth creation encompass the ability to save, the selection of investments, and investment discipline.
The ideal starting point for successful wealth creation is financial planning. This entails setting goals, assessing income inflows and outflows, and determining risk appetite. These steps enable a clear identification of the end objectives, available savings after expenses, and risk-bearing capacity.
A professional financial planner is best suited for this task, as he/she takes a methodical approach and offers unbiased advice. The journey to creating wealth and achieving financial goals relies on maintaining financial discipline, making wise investment choices, and conducting annual financial reviews to make necessary adjustments.
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Denne historien er fra March 2023-utgaven av Beyond Market.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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PRUDENT PRACTICES
Banks worldwide navigate a complex balancing act, steering economies toward growth while safeguarding financial stability through thoughtful management of interest rates and credit risks
RETAIN ROULETTE
Inexperienced investors spin the market wheel, chasing dizzying valuations and risking a bubble burst
UNRAVELED THREADS
Bangladesh's crisis disrupts global textiles, offering India a potential opportunity, but production constraints limit its gains
PASSING THE BATON
Succession planning helps ensure uninterrupted leadership
RISKY BUSINESS?
SEBI's efforts to protect retail investors from derivatives market risks could inadvertently dampen market volumes
INFLATION-PROOF YOUR CHILD'S FUTURE
Inflation might be stealing your child's future, but children's mutual funds can be their superhero
EMBRACE UNCERTAINTY, SAYS MARKS
Howard Marks urges investors to embrace uncertainty, long-term thinking, and focus on controllables, shunning in his memo “The Folly of Certainty”
IMPORTANT JARGON
70% OF INDIVIDUAL INTRADAY TRADERS IN THE EQUITY CASH SEGMENT MAKE LOSSES, FINDS SEBI STUDY
AN ASCENT T'O NEW HEIGHTS
The IMF predicts India's economy to reach 55 trillion by 2047, driven by various economic indicators showing positive growth and government initiatives
CARRY TRADE CRASH: GLOBAL MARKETS REEL
Japan’s Policy Shift Sends Shockwaves Through Global Markets, Including India, as Yen Carry Trade Disintegrates
