Clear Goals and Discipline: How Small Investors Can Build Lasting Wealth

There is no one-size-fits-all, the answer will depend on your needs, personal preferences

- Vivek Sharma

Small investors often feel intimidated by the fancy jargon financial experts use. But you don't need to understand all that to build big wealth. All you need is a solid investment plan, discipline to avoid critical mistakes, and the patience to stay on course. If you stick to the basic principles, you'll likely do better than most people. Let's dive into each step in more detail.

Building an investment plan

As the saying goes, failing to plan is planning to fail. A solid investment plan will guide your decisions every step of the way. If you need to consult a financial advisor during this stage, don't hesitate—it will be worth the cost. Not having a well-thought-out plan is like entering a dense jungle without a compass to guide you through.

The first step in building an investment strategy is to set realistic expectations. People basing their expectations from the market based on its recent performance are setting themselves up for disappointments. Your expectations should be grounded in the long-term performance of the stock markets. Historically, equity markets have delivered average returns of 12–15%, while debt instruments average around 8%. If you have a balanced portfolio with a balanced mix of equity and debt, your returns will likely fall between the two.