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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Diese Geschichte stammt aus der March 2023-Ausgabe von Beyond Market.
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