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Here’s how investors can manage their wealth


Wealth management is something that ensures that individuals keep track of what they spend and what they save. It helps us on how we can manage our savings in order to grow them and seek the power of funding.

While money is considered one of the most important financial assets, there is something more compelling. We all maintain a balance between what we spend and what we save. In recent times, there has been an increase in investment habits among people, and individuals tend to invest more despite the volatility of the market. It is crucial to manage even the smallest amount of savings and focus on its growth.

Traditionally, with limited sources of income and investment / savings options, we had very limited options. The emerging digital age and technological advancements have made it possible to invest in the various options available and to diversify the portfolio according to an individual’s needs, financial goals and risk appetite.

Here are some ways that can help people manage their wealth effectively: –

Assess risk tolerance

It is crucial that we focus on our risk appetite and then make the investment decision. Early investors have a higher risk appetite and can therefore invest more in equities. Focusing on the different options available is the second step once you understand your ability to take the risk. The higher the risk, the higher the return.

Balance the investment portfolio

As rightly said “Never put all the eggs in one basket”, we need to diversify our portfolio according to needs and goals. Careful consideration of all available options should be done before making a decision.

Stay away from financial goals

Having a blurry picture of your financial goals won’t help you define the best wealth management decision. Having a long-term horizon helps make the right decisions and goes a long way in supporting financial goals.

Early investment is the key

If your goal is to manage your wealth, time is your best friend. The earlier you start, the higher your risk appetite and therefore the higher the returns. The more time you give your investments to grow, the more your wealth under management. One can be afraid and anxious during the first few years, but proper planning and research helps in making a thoughtful decision.

Keep a regular check on investments

Today, investments can be managed actively or passively, depending on the needs and time frame of individuals. People who passively manage need to keep track of their finances, at least quarterly, and adjust their portfolios according to the current economic scenario.

Emergency fund

Always manage an emergency fund during extremely unforeseen events. While planning helps manage wealth, some events can be completely unpredictable. Managing an emergency fund helps to overcome these emergencies. People should never make emotional decisions while managing their wealth.

Corpus of retreats

Having a long term horizon really helps. People should keep an eye on maintaining a corpus for retirement. Once people have set their goals, Adjusted Time Value of Money can help people build a huge body of work for retirement.

Keeping a clear view of your needs as well as clarity on financial goals can go a long way in helping you manage your wealth. If you have an investment professional, he or she should only recommend investments that are right for you. The best investment professional is one who fully understands your goals and matches investment recommendations with your goals.

The author, Saurav Basu, is Head of Wealth Management at Tata Capital. Opinions expressed are personal

(Edited by : Anshul)

First publication: STI


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