From Saver to Investor: A Sri Lankan perspective

Charterholder since 1999, brings over 15 years of experience in both locally and internationally. As the current President of UTASL, she has been at the forefront of a remarkable transformation in Sri Lanka’s unit trust industry.

- Cristine Dias Bandaranaike, CFA

In the early 1990, my mother, then a young widow, took a bold step. She sent me, her only child, to university overseas. When questioned about how she funded my undergraduate education, she revealed that she had done so without taking bank loans.

Instead, with remarkable foresight, through a combination of prioritizing shrewd saving and compounding interest, she was able to use her main source of income (rental income) to cover the full cost of tuition and living expenses. By the end of the period, her savings were depleted entirely. However, given the high levels of interest rates in Sri Lanka during the 1990s, together with resets of rent, she was, with time, able to restore her savings to a comfortable level, enabling her to face retirement cheerfully. I admire my mother’s financial acumen, which perhaps influenced my career choice and desire to help others succeed financially.

However, we now live in a different era of interest rates. Widows of the 2020s would struggle to replicate this path. The early 2020s saw skyrocketing inflation and severe erosion of purchasing power, in addition to currency depreciation. Those on a fixed income, such as pensioners, were the hardest hit.