Creating wealth

I recently attended seminar series about investing in Unit Trusts. The whole idea of a unit trust is it allows lay investors like me, who are clueless about the stock market and all the acronyms that are associated with equity investments to put their money in a Unit Trust, so a fund manager can invest in the investment instruments available in the market and get me a return on my investment.

The last presenter, who is the CEO of one of the fund management companies touched upon planning your financial goals and wealth creation. This was an eye opener for me.

Personally, for me, investing in the stock market has been like a game for me. I did it because the general perception was that it was a place where you can make money. Also my interest in the stock market was kindled because in one of my previous jobs I managed a project that attempted to build a back office application for stock brokers. And they also had an online trading solution which caught my interest.

But this seminar, opened my eyes to the more important aspect of planning your investment and to treat it as a mechanism to create wealth. The aspect of growing your investment at a rate greater than the rate of inflation so your money retains its value down the line. And also choosing your investment instruments that match your financial goals.

Upto now I have never thought of planning for retirement. I have also never planned to save for my kids future, or higher education. I live with the thought that when the need comes I will be in a position to meet the needs. So far, I have managed to do that, upgrading my income as my expenses grow. I would worry about them when they become the necessity, but not prior.

But this seminar opened my eyes to the fact that these are things that are better addressed through planning and smart investing. Of course, they positioned the Unit Trusts as the smart investment in this case, but nevertheless the point about the need to plan is very valid. If planned and executed gradually, myself and my family will not feel the pressure when the need arises.

There are a few things that I need to plan for, and start investing and growing the money for:

  1. Retirement
  2. Children’s education
  3. Holidays/vacations
  4. Life-style upgrades

Out of those the first two are paramount. But thankfully, those are things that can be done at a slower pace.


I haven’t foreseen myself in retirement. I would like to be actively engaged in some sort of gainful activity till my death. I always thought that I would have some kind of a business, that I can hand over to my children or to an able management but would still keep me occupied. I don’t think I would want to go into a full retirement and end up doing nothing. I would find that to be too boring.

But in any event, it would be a good idea to invest for retirement. So that there would be money, for expenses and to indulge in whatever activities, be it charity or social service or travelling or having fun, that would take our fancy, without having to depend on others.

As we grow old, our battles with health can also become more intense. In other words the health care expenses can go up. So an income stream that can foot these expenses would be welcome.


Saving for children’s education

This is probably the expense that would occur first and the most pressing and necessary requirement. I want my kids to follow their dreams and desires when it comes to what they want to do with their lives. I will give them only one piece of advice. ‘Be the best you can be!’.

So in order to fulfill their dreams I want them to be able to get the best (higher) education or training that they can get. Cost of which should not be a worry on them and definitely not hinder their dreams.


In any case, the one general lesson is that investments should be made in instruments that give a real return, a return greater than that of inflation. And the value of money should be greater than the value of the amount now. Considering that our needs are going to grow as we age as a family, this is a basic need. And these investments should be done regularly and be made to become a habit, much like the habit of saving, but instead of saving, it should be investing. As things stand now, the simple savings schemes do not cut it anymore.

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