Wealth refers to the market value of all your assets. This basket can comprise of assets such as equity shares, gold and even real estate.
For creating wealth, you have to hold assets for long periods of time, say, 5, 10 or more years. There is no defined period for wealth creation nor a defined quantum. How much wealth you create depends on the quality of the asset and the price others are willing to pay for it. As value of assets increases with time, a good quality asset, held for a longer duration can create a lot of wealth.
For goals such as retirement, income generation is not sufficient as money earned through specified-return products rarely beats inflation in the long run. It is wealth creation that is able to grow your money faster than the value that inflation eats away.
However, unlike income generating securities that come with certainty in the near term, asset values can be volatile and hence, wealth creation is a risky proposition. This smoothens out if you hold on to your asset for longer periods of time.
A balance of income and wealth creating assets needs to be maintained in one’s portfolio.
At Saksham Wealth, we offer funds with multiple assets like Equities, Gold, Debt and Real Estate. This enables a stable portfolio across all economic cycles. Our annual Wealth Creation Study gives a birds eye view of our understanding of the process of wealth creation. You too can benefit from our experience. We are just an email away. Do write to Sameer Rastogi at Sameer@sakshamgroup.com .