What is the most reliable and safest way to build wealth?
- Asked By
- Updated On:27-Jan-2021
- Replies:4
Short Answer
Building wealth always seems to be a farfetched idea if you want it quickly. However, if you wish to build it legally, then there are different ways to build wealth. Check them out.
Detailed Answer
Well, if you’re looking for wealth building investment options then based on my assumption that your goal is to achieve financial freedom. If that’s the case, my only answer is, invest in stocks. Whether you invest directly in the stock market or invest through equity mutual funds. Either way, you can reap the benefit of high returns received in stock investing.
But, knowing the investment option is not enough to build wealth over time. Many investors succeed to make wealth with just fixed income deposits, debt funds, and bonds. What you need to know is how you can structure your savings and investments in a way that can help you to build wealth over time.
Financial independence is a stage where you no longer need to work for money only if you’re interested. And you’ve enough finances saved and invested that allow you to maintain your lifestyle even when you are not working. Financial independence can help you achieve your dreams and goals that once impossible.
But, to live such a life, one has to follow a strict disciplinary approach and implement it within your lifestyle. For instance, you need to start tracking your income, expenses, and savings. Create a budget plan that allows you to handle your expenses and still come out with enough funds to make investments for future goals. In doing so, you also need to clear off your debts which may stop you from achieving your goal of building wealth.
Once you are done with all that you should create a short-term emergency fund in case of any unfortunate event or unexpected expense. By having an emergency fund, you can ensure that your long-term investments won’t get interrupted by short-term expenses.
After this, you can start looking towards options for long-term investments. As I mentioned earlier, direct equity investments and mutual funds is a great way of wealth building. You can select from the stocks and mutual funds and decide which one can give you better returns in the future. Make sure to pick one that helps you in achieving your financial goals hassle-free.
Next, you will have to keep patient and maintain your investment portfolio without the worries of short-term fluctuation and timely diversify it for risk management. Trust me, over the years, it will help you generate the income that would not only help you build wealth but give you the financial freedom that you always longed for.
These are some of the wealth creation tips. Do you have any more to share? Feel free to comment.
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Discussion (3)
Starting a disciplinary investing approach is essential to attain financial freedom. However, it's easier said than done. We tend to deviate from our financial goals every now and then for one reason or another. I believe, in today's tech savvy world, automation of investments is a good way to invest regularly and build wealth. Even if we forget to put money, the automation feature (e.g. auto debits to SIP) will continue and keep accumulating our wealth.
Very rightly said! But, investing in stocks may not be the best option for all. A lot of risk is involved in direct stock market investing. So, one needs to be cautious and act wisely. What about people who don't wish to take any risk and don't want to put their hands in the dynamic stock market?
You can get rich by investing in the metaverse if you pick the right assets and invest in them at a reasonable price. The whole concept of the Web 3.0 and Metaverse holds immense growth potential, therefore your assets will grow alongside the growth of the whole industry.
IPOs can be a good option for beginners as they provide an opportunity to get the shares of good companies at an attractive price. Though IPOs can provide good listing gains and quick profits, good companies can help you to create massive wealth in the long term.
Navigating the huge selection of investing possibilities can be a difficult chore for middle-class people.There are a lot of options, ranging from mutual funds and fixed deposits to the National Pension System. This will give middle-class Indians a thorough insight to the finest investing strategies.
Fundamental analysis is an important part of stock investing. You can either refer to the company’s quarterly reports for the data or use any fundamental analysis and stock screening platform to analyse the data. Using a stock screening platform makes the job much easier as you get all the necessary data curated in one single place.
Arbitrage Funds are mutual funds with an objective to profit from inefficiency in the price of securities in two different markets. We look at their taxation, meaning and difference with liquid funds in this post. The fund invests in equity and debt instruments.
Who doesn't like to get rich fast? While there are several ways to do so, we have enumerated ten different ways by which getting rich fast can turn from a dream to reality.
The Mirae Asset NYSE FANG Plus ETF Fund is a good option for Investors who want foreign exposure. The Equity allocation is very concentrated to just 10 stocks which makes this ETF very volatile and risky. This ETF consists of the top 10 stocks in their respective sectors mostly TECH, like Amazon, Netflix. Facebook, etc. Hence Investors with high-risk tolerance and a long time period should consider this fund.
CIBIL is your credit worthiness report. Before giving any loans or credit cards, banks check your CIBIL score to get an idea of you loan repayment capacity.
Investing in stocks can make you a millionaire, provided you follow the necessary steps. These include investing regularly, picking good quality stocks, and most importantly playing the long-term game rather than trying to make a million in months or a couple of years.
IPO or Initial Public Offering is the process through which a private company goes public by offering its shares to the public for the first time.
Raghav Jha
Well written but not everything is easy as it seems. Let's talk about the dark sides that happened to lot of companies 2-3 years ago. There were attractions of corruptions, scams, misusing services, increasing debts, NPA affecting the stocks badly. Investing in stocks (directly) for long term is not as easy as compared to 10 years ago. Mutual Funds sound acceptable to neutral risk taker, even debt mutual fund also have a chance of risk considering the dhfl downfalls. It's acceptable because fund managers kept changing the stocks for funds to exercise best performance. But it's acceptable only for those who don't have any idea about fundamental stocks at all (but still knowledge to acquire is your only solution to get better returns). In spite of all these, I believe India is going to have a recovery economy since lots of plan are being reviewed these days plus lot of strictness in regulatory parts, so investing would be better option. But it's not a bad idea to diversify into gold, bank MOD (especially for monthly payout, which is impressive feature). My point is that risk management is an art. No one should throw and run for long term, instead manage and review the portfolio time to time depending on economic / stocks predictions, giving strict self-stop loss to prevent from self-trap.