To lead a prosperous life, small habits can make a huge difference and this holds true especially when it is about seeking financial independence and creating wealth.
Financial confidence and prosperity can be achieved through a disciplined approach and thorough knowledge about how to save, invest and protect your money wisely.
To discuss the approach and roadmap for wealth creation and management, a panel discussion was held on ‘creating prosperity with financial discipline’ at NSE in Mumbai, during which experts deliberated on how can one achieve financial freedom over a long period of time.
Panel members Niranjan Hiranandani, Co-Founder and MD, Hiranandani Group; Sharad Mittal, MD, Motilal Oswal Real Estate Fund; RM Vishakha, Managing Director and CEO, IndiaFirst Life Insurance; Radhika Gupta, CEO, Edelweiss Asset Management Ltd; and Feroze Azeez, Deputy CEO, Anand Rathi Private Wealth Management; spoke at length about different nuances of saving and investing. The panel was moderated by Manisha Gupta, Editor – Commodities & Currencies, CNBC-TV18.
“When you are talking about investing for your future and from a financial discipline perspective, and creating for the long term… what the market is doing today is really not important. One should not get worried about what it is doing today because that is the nature of the beast. It is not going to stay constant. We need to take it as it comes,” said Vishakha.
The experts said people should invest in a disciplined manner, tweak it as per their goals and not get perturbed by the gyrating markets, emphasising on the need to stay invested.
“Returns are expected and risks are managed. Before you manage anything, you will have to measure it. Risks have measurements. So, you should spend time and understand the two sides of the coin. If you don’t manage your risks, you won’t reach the long term,” said Azeez.
Another important factor to achieve financial discipline is to have keep expectations closer to reality.
“It is very important to have right match between need and goal and what your investment instrument will give you,” said Gupta.
The panel also gave insights on about different asset classes such as equities, real estate, insurance, mutual funds and more.
“If you look at long period of time, there are only two asset classes that have created wealth in India and globally--equity and real estate. Over a long period of time, the real estate has generated a return between 12-14%, an inter-lead of 2% and capital gain between 10-12%, that’s a reasonable expectation to have,” said Mittal.
The realty experts said reforms such as RERA, GST, etc., have made the sector attractive.
“The kind of security that RERA has brought to the home buyer is good. The consolidation in the industry is happening very very fast and that is going to change the face of the industry,” said Hiranandani.
Meanwhile, the panel discussed the nuances of investments, asset allocation, diversification, and debunked some common myths.
“Money deserves management principles. Learn from mistakes and write them, don’t conclude the wrong thing. You should have 60% in equity, rest 40% between debt and gold,” said Azeez.
For everything else to follow, people need to start first with whatever amount they can.
“Start, no matter how much salary you have. Take your monthly salary and put some money aside and park it. Start with a habit of saving. Secondly, take your monthly salary and start SIP and through your journey, understand what your goals are, choose financial products to meet those goals. Thirdly, if you are new investor, don’t look at it every day. Hold on, it’s a long jounrney, be patient,” said Gupta.
Money is meant for a purpose and when you put aside money, think of protecting it and generating wealth to meet goals, financial prosperity will follow.
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