All About Wealth

It's not just about generating wealth but also managing and protecting it

Illustration by Raj Verma Illustration by Raj Verma

Had you invested Rs 1 lakh in Reliance Industries in 2015, it would be worth Rs 4.4 lakh now. If you had invested two days before the lockdown, it would have grown even faster to Rs 2.5 lakh today. But if you invested in smaller firm GMM Pfaudler, it would have grown to a whopping Rs 14.68 lakh in last five years. Letting your money work as hard as you do is the key to wealth creation. Equity investment remains the preferred mode of wealth creation and sharing.

In the following pages, consider how some of India's biggest equity wealth creators have fared in the past five years. They are clubbed in four categories: Super Large, Large, Medium and Emerging. If you missed investing in them, check out those that are the potentially biggest wealth creators in future (See Stocks to Look Out For).

Still, with Murphy's Law at work, it's vital to diversify and look beyond equities. The recent market crash, when the Sensex fell almost 38 per cent from peak within two months, showed equity wealth can erode as fast as it is generated. Hence, preservation and growth of wealth requires deft investment skills. Diversification with the right mix of asset classes like equity, debt, gold and real assets is the time-tested tool to manage wealth. Each asset class has its own challenges. Check out the factors affecting different asset classes and how to handle your wealth effectively under the circumstances.

This special issue of Business Today goes beyond asset creation - into asset management and protection.

When your corpus grows and your risk-return expectations do not remain confined to mutual funds, seek professional fund management services of PMS and AIFs. Top performers have delivered over 15 per cent in the past year even though the market is still to recover fully. When your wealth grows to the next level, avail the services of a family office on the lines of the Bajaj Family, Azim Premji or N.R. Narayana Murthy's Catamaran Ventures. They not only help manage and grow wealth, investment and properties but also ensure seamless transfer to the next generation.

Last, but not the least, is protection of wealth from any unfortunate incident related to life or damage to physical assets - events that could ruin years of asset creation. That is where life, health and general insurance help with asset protection at least cost. But how? Find those answers in the pages ahead.