Making your money work

People often wonder how individuals with average-paying jobs can afford to retire early or fund their kids’ private education, while others struggle constantly with financial stress, It all comes down to how one manages their money. One of the most effective strategies is investing.

- By WASANTHA MAPATUNA, CFA

In Sri Lanka, most of us are familiar with saving through fixed deposits, owning gold, or contributing to the EPF and ETF. But many don’t take that next step—growing money through investing.

Let’s explore what investing really is, why it matters, and how you can get started today.

Imagine going on a road trip but having no clue about where you want to go, so you start driving aimlessly hoping to figure out your destination on the way; you will end up wasting time and running out of fuel trying to reach nowhere which is the same as managing your money without a concrete plan.

Think of financial planning as your roadmap. It helps you understand where you are now and where are you heading—whether that's building a house, starting a business, or retiring with financial freedom and how to get there. Without a plan, it’s easy to fall into common traps such as spending more than you earn, overusing credit cards, or failing to prepare for emergencies. However, with a simple plan in place, you can improve your financial habits, reduce your stress, and work steadily toward long-term goals.

In Sri Lanka, we often associate financial safety with saving habits such as keeping money in a bank account or fixed deposit. While saving is important for short-term needs and emergencies, your money typically grows slowly.

On the other hand, investing is about putting your money into assets like shares, real estate, bonds, or collective investment schemes (unit trusts) with the expectation that they'll grow in value or generate income. It carries more risk, but also greater potential returns. Investing is better suited for long-term goals like sending your child to university or planning your retirement.

How investing helps grow your wealth