26 Oct, 2012

Guidelines for Wealth Management in India

In India, people know how to create wealth but they are simply ignorant towards managing it efficiently. They think that making a fortune is enough and forget the crucial fact that managing it and progressing further on the basis of it is even more significant. You don’t need to be a financial expert to manage your wealth but following simple money management guidelines can help you in managing and increasing your wealth in the long run.


Wealth Management is an arduous task. Let’s ponder over some essential tips for wealth management


1. Formulate a financial goal– To manage your wealth the right way, it is very important to formulate a financial goal. The goal should be rational, practical and attainable. It should specify objectives and targets to be achieved. The financial goal so formulated should specify that outstanding debts should be cleared at priority, a fixed amount should be saved every month and a close check should be kept on one’s assets. The financial goal so formulated should also mention performance criteria so as to measure one’s performance against a benchmark.


2. Identification of risk-appetite– Risk and returns are two sides of a coin. These two aspects are inseparable and directly proportional. Everyone is aware of the universal saying, ‘greater the risks, higher the returns’. Investment avenues which assures high returns can also leads to heavy losses. One has to realize one’s risk-taking appetite and invest accordingly. Once you recognize your risk-tolerance ability, you will invest in a portfolio with that given degree of risk. It is called ‘efficient frontier’. This is an equilibrium point between risk and return.


3. Diversify your funds– Investing in a single sector is definitely the riskiest thing to do with your funds. One shouldn’t park all the funds in one investment option as in the event of loss in that particular area, the person will lose the entire sum. Therefore it is very crucial to diversify your portfolio. This is why mutual funds are the best option for investment. Once you hold a variety of assets, loss in a single sector cannot affect you that much. The portfolio should include assets like money market instruments, stocks, bonds, commodities, real estate etc.


4. Keep emotions aside– Most of the Indians, invest with their heart and not brains. They get carried away with the emotions and invest their funds in not-so-profitable avenues. Infact there are people who invest their hard-earned money on the basis of hit and trial method. They leave their rationality and logic to rest which is wrong. So, one should make it a point to invest with reasonable and practical approach and on the basis of sound logic.


The task of wealth management becomes easy if these points are kept in mind or you can hire experts for the same. If you are looking for professionals for wealth management in India, please click on contact us.

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