Wealth creation: Four key steps in the long journey


Jan 30, 23 | by: Sanjeev Anand

Like improving your health, creating wealth to achieve financial freedom must be included in your to-do list. The plan for your portfolio investments does not differ much from a fitness regime. You won’t make money if you admire star investors’ portfolios. You must work to build a robust portfolio yourself. And it takes time. You must study businesses, talk to management, customers, suppliers, dealers, and fellow analysts, do channel checks, study the company’s financials and check corporate governance issues (if any). A lot of hard work goes behind building a portfolio of stocks that will compound your wealth year after year. There’s no shortcut here.

Be patient and persevering

Fitness is not a weekend job, nor is it one-dimensional. You must exercise regularly, regulate your diet, get adequate sleep, handle stress effectively, and juggle between work and personal commitments. None of these can take a backseat. You must be consistent with your efforts, patient with the results, and persevere despite obstacles.

Your equity portfolio also demands a regular regimen of reading, researching, and discussing with your financial advisor. Only some days do you come across a stock that qualifies as a multibagger. But, if your portfolio does not underperform the benchmark indices, you’ve made a start. And, if you can beat the index, you’re improving. If you can do that year after year, you’ve become a pro. The whole journey takes time, effort, and commitment from you, but the results will be gratifying.

Don’t fall for instant results

Miracle drugs will always be available to boost sports performance or muscle growth. But don’t fall for any of these “miracles.” They are dangerous and will only ruin your health over the long- term. Real fitness comes from actual practice and exercise, not through shortcuts.

Similarly, wealth creation doesn’t happen when you follow sure-shot tips, or “chase momentum, or run after penny stocks. Instead, you build wealth by giving time to your investments. As a famous saying goes, “Time in the market is more important than timing the market.”

Be consistent

While you will stick to your fitness plan as much as possible, there will be days when things will go “off-plan.” It could happen due to health reasons, personal/professional commitments, or numerous other reasons. It’s okay, and it’s expected. The key is to get back to your regimen as soon as possible.

You may need to withdraw some of your equity investments, which were meant for the long term, for unforeseen reasons. Secondly, you may be unable to invest for a few months due to liquidity demands elsewhere. The key is to get back to investing as soon as things normalise.

Hire a coach to reach your goal faster

Without a doubt, you must do all the heavy lifting yourself. However, getting an expert to coach you can help a lot. In your wealth creation journey through equity, you should be vigilant regarding your investments and decide on the financial risk yourself. However, you can always hire experts to handhold you in your wealth creation journey.

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