From saving to investing: Why Sri Lankans need a smarter wealth strategy

FOR generations, saving has been the foundation of financial planning in Sri Lanka. Fixed deposits, savings accounts, and Government securities have long been trusted as the safest ways to secure one's future. But in today's economic reality, saving alone is no longer enough.

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With inflation averaging over 30% in recent years, even a 15% return on fixed deposits translates into a negative real return. The money you've carefully saved is effectively losing value. When each rupee buys less tomorrow than it does today, preserving capital is not sufficient; you must also focus on growing your capital.

This hard truth has already sparked a shift in behaviour. Over the past five years, the number of Unit Trust investors in Sri Lanka has more than doubled, while assets under management have risen by 172%. Savers are recognising that the old model of relying on passive interest income no longer works.

Both saving and investing are vital pillars of financial planning, but they serve different purposes. Saving is about safety and liquidity, having funds ready for short-term needs. Investing, on the other hand, is about putting money to work for long-term growth. What Sri Lanka needs now is a balanced approach - save for stability, invest for progress.

One of the most accessible ways to begin investing in Sri Lanka is through unit trusts. They provide an attractive middle ground between safety and growth, particularly for first-time investors.

Here's why unit trusts stand out: