Wealth Creation

Starting the process of Investment of money is the first cornerstone to wealth creation especially when we know that India is on a fast track growth. In in the pre-independence era (before 1947) India was mainly characterized by people who saves and saves-heavily. It was the country of savers. But post-independence the growth has picked its pace and also is the rate of inflation. Prices of essential commodities like food, housing, gas, electricity, education etc has been increasing at a dramatic pace of more than 9%. This is one of the biggest disadvantage of a growing economy, inflation rate seems to fly like a limitless bull. Investment is required to fight inflation and in addition make your money grow.

How Warren Buffett became a billionaire

Share Guide

Top 5 rules of long term investment


Change of shift from saver to an investor

The transition form a “nation that only saves” to a “nation of investors” is evident. Taking the statistics of last 35years, the number of retail as well as institutional investors in India has multiplied several folds. Not only Indian investors but international investors is eying India as an Investment heaven. Only next to China, India has been rates as the fastest growing economies in recent times. India has learned to differentiate between saving and investment. If earning money is a need then savings and investment should be a habit. Savings in isolation is not of much help because inflation is eating our money. Inflation makes our money less powerful each day. This is the reason why we need to fight inflation (to protect our money) by a great tool called investment. India is growing and a person who is investing is actually contributing to the growth of the nation; in return he/she will get the desired returns. Important is to identify a suitable “asset class” for oneself and start investing in it. Like retired people would like to invest in bonds, deposits; middle aged men would like to invest in mutual funds, real estate but people who are young and dynamic would like to invest in direct equity like stocks.


Confidence of Investors and GDP growth

Why we have seen this transition and change of shift form savings to investment? The answer clearly lies in the confidence of Indian Investors in the future growth prospects of India. This confidence is fueled by a consistent GDP growth of around 8%. Average performance of various asset class is as listed below:

  • Savings account (3% to 3.5%)
  • Bonds (6% to 7%)
  • Bank or Companies Deposits (6% to 7%)
  • Gold (8% to 10%)
  • Real Estate (10% to 12%)
  • Stocks (12% to 15%)
  • Art (15% to 20%)

Talking about short term investment horizon and GDP growth almost assured at 7% to 8%, the focus on investors in Indian market shall be more on selecting a suitable asset class for investment rather then debating of growth and risks of investment. India will grow and top brains are convinced and assures average retail investors of this growth scene. People who are already in the boat (investing) might have realized the power of investment in Indian economy, but for people who have not started yet for them its not late. In long run India is certain to make big money for its investors but consistent GDP growth rate proves very encouraging even for shot-term investors.

But India is India and volatility is only the other name for this dynamic country. Changes in political scenario, inflation, drought, flood, rise of interest rates, market demands all in totality effect the performance of the market. People should realize that India is a growing economy and such volatility is expected. The price of stocks may fall and rise but investors must not loose faith; it is important to keep the focus and attention of the bigger picture of India’s growth.

Investing Intelligence should be the focus

This an opportunity for all Indians and overseas investors to invest heavily and bank on India growth. Investors should buy assets whether it is stocks, real estate etc focusing on long term perspective. This website has been developed with the objective of increasing the Investing intelligence of its readers. The focus is on Indian investment but the same concept can be applied across the globe. The author of getmoneyrich.com is a big enthusiast of the process of Investment. He is a firm believer in the concept of ‘working for self can make this world a better place to live’. He has also been heavily influenced by the theories and practices of Warren Buffett and would like to practice investment just like his guru to attain Financial Independence.

You can read more here

Rating: 5 stars