Want to be a crorepati early? Prime Wealth Finserv co-founders explain how

Balance, discipline, and right asset allocation are the keys to making money in a volatile market. Chakravarthy V and Chakravardhan Kuppala of Hyderabad-based Prime Wealth Finserv tell Business Today the way how investors can create wealth in this market, why gold still matters and how active strategies can beat the index. They also share one simple financial habit that can make you a crorepati early. The Hyderabad-based co-founders also flag the common mistakes investors must avoid while chasing wealth. Edited excerpts:
 
BT: Domestic equity markets have largely remained range-bound over the past year. In such a volatile environment, how do you approach asset allocation for your clients?

Chakravarthy V: In a market that is both range-bound and volatile, I stick to my core-satellite strategy. The core is comprised of stable, low-risk assets, such as large-cap stocks and debt instruments. The satellite part is more active, taking advantage of growth opportunities in mid-caps or other assets, such as AIFs. Allocating funds to liquid assets, such as money market funds, is a significant component of this plan. This way, clients can quickly take advantage of market opportunities without having to sell their core holdings. Because the market is so volatile right now, some of the portfolio should also be in gold, which has done well during market corrections in the past (it went up 21% in 2024). This method strikes a balance between stability and the ability to take advantage of market changes.
 
BT: Which asset classes are you most bullish on for the next 2 years? Why?

Chakrivardhan Kuppala: Asset diversification will be important in the next two years. Equities will still be a major part of growth, but I'm especially interested in sectors that are about to recover from a downturn and are currently undervalued. Private equity and venture debt have a lot of growth potential, especially as more people pay attention to early-stage companies and their growth potential. AIFs could give good returns, especially on distressed assets or infrastructure. But liquidity risk is an important thing to think about. On the other hand, gold is still a good long-term hedge, and demand for it keeps going up during times of uncertainty. The plan will be to find a balance between these riskier investments and safer ones that make money.
 
BT: Do you recommend passive investing or prefer active strategies for long-term wealth creation?

Chakravarthy V: Active strategies have a lot of potential in the current market. The Indian market is always changing, and changes in one sector can create chances that passive strategies might miss. Active managers can find sectors that aren't doing well and move into ones that have a lot of room for growth, especially mid-caps or new sectors that have a lot of potential. That being said, passive investing is still a simple way to get in on broad market growth, even in efficient markets or for people who are just starting out. But for the next two to three years, people who want to take advantage of changing market trends and sector rotations should focus on active investing because there is room to beat index returns.
 
BT: With rising interest in private equity (PE), venture debt and AIFs, how are you helping clients navigate risk vs returns?

Chakravarthy V: PE, venture debt, and AIFs are appealing because they have the potential to make more money, but they also come with more risk. The first thing clients need to know is that these investments take longer to pay off and aren't easy to get out of in the short term. When thinking about private equity (PE), it's important to look at the fund managers' past performance and know what exit strategies they are aiming for. Venture debt has a higher return, but it also has a higher risk of default and is usually linked to startups. To keep the risk in check, I focus on sector diversification within these investments while also keeping a core of more stable, liquid assets in the portfolio. It's about finding the right level of risk for the client's financial goals and comfort level.
 
BT: What common financial mistakes do you see Indian investors making today?

Chakrivardhan Kuppala: A common mistake I see is trying to get high returns without thinking about the risks. A lot of investors are drawn to risky investments that promise quick gains but end up with portfolios that are too focused or unstable. Another big problem is emotional investing. When you sell when prices go down or get too excited when they go up, you end up buying high and selling low. I also think that a lot of investors don't do a good job of accounting for taxes, especially when it comes to capital gains on stocks. They don't realise how much they lose to taxes, especially if they don't make their portfolio as tax-efficient as possible. Lastly, not rebalancing your portfolio regularly can cause you to be too exposed to high-risk or underperforming assets over time.
 
BT: Share one financial habit which you think everyone can adopt to become a crorepati early.

Chakrivardhan Kuppala: Starting SIPs early and sticking with them is the best way for most people to build up a lot of money. The magic of compounding can work even if you start with a small amount. If you keep putting money into equity mutual funds, it will grow. If you start saving Rs 3,000 a month at age 25 and get an average return of 12% a year, you could have more than Rs 1 crore by age 45. It’s not about timing the market; it’s about being disciplined. This habit, along with the knowledge that investments will go up and down but will eventually grow over time, is the key to building long-term wealth without taking big risks or making risky bets.
 
BT: What is your view on India’s wealth management industry growth as disposable incomes rise and financialisation deepens?

Chakravarthy V: The wealth management industry in India is changing quickly because more people have money to spend, and the country is getting better at managing money. As more people look for ways to manage their money that go beyond traditional savings, there is a growing need for investment options that are more varied. Digital platforms are a game-changer here because they make it easier for more people to invest. But as financial products become easier to get, people will need to learn more about money. The hardest part is making sure that people know the risks and rewards of different products. As more Indians realise how important it is to plan for the long term, the wealth management industry has a lot of room to grow. This is especially true as more people move their money into equity markets, mutual funds, and other types of investments.
 
BT: Individual health and life insurance have been made GST-free, FM announced on September 3. Do you think the move will give a further boost to the insurance industry?

Chakrivardhan Kuppala: The choice to get rid of GST on health and life insurance premiums should definitely help the insurance industry. It makes premiums cheaper, which makes insurance more affordable for India's middle class, who don't have enough insurance. More people will probably think about getting health and life insurance if it is easier to get. This move is also in line with the larger goal of making more people in India financially included, where many people still don't have basic protection. Over time, this could lead to a big rise in adoption rates, which would help close the protection gap in the country and boost the insurance sector's growth.