By Sarvjeet Singh Virk
In India, financial success is often associated with high earnings. But if wealth were just about income, then why do so many high-salaried professionals still struggle with money while several with modest earnings build lasting wealth? The answer lies not in how much we earn but in how we manage, grow, and think about money.
Despite being one of the fastest-growing economies, India still grapples with outdated financial habits. More than 50 per cent of Indians rely on traditional savings accounts as their primary financial tools. The reluctance to shift our financial mindset may be holding us back.
Here are five powerful shifts that can redefine how you approach money and wealth creation.
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Let Your Money Work For You
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India’s household savings rate is around 18 per cent of GDP, one of the highest globally. However, a large portion of these savings remains in low-yield fixed deposits, which barely outpace inflation. With inflation averaging 5-6 per cent, parking money in instruments that offer similar returns means it sits ideal in your accounts.
The real shift happens when we move from passive saving to intentional wealth creation. Historical data shows that the Indian stock market has delivered an average annual return of 12-15 per cent over the past two decades, significantly outperforming fixed deposits. Similarly, mutual funds through systematic investment plans (SIPs) have gained popularity, with SIP contributions crossing Rs 17,000 crore per month in 2024. Your money should work for you, be it through compounding in equities, generating rental income, or diversifying through gold and bonds.
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Technology
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Financial literacy remains a major challenge in India, with only 27 per cent of adults classified as financially literate. Many believe investing is complicated or reserved for those with special expertise, leading to hesitation in wealth-building decisions.
However, technology has made financial knowledge more accessible than ever. AI-driven platforms now provide hyper-personalised investment insights, automate budgeting, and optimise saving strategies. Digital payments and UPI adoption have already transformed how Indians handle transactions, proving that embracing financial tech leads to empowerment. Those who continuously learn and adapt to these innovations will always stay ahead in wealth creation.
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Don’t Be Afraid Of Taking Risks
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Risk aversion is deeply ingrained in India’s financial culture. Over 60 per cent of household assets are locked in real estate and gold, which are perceived as ‘safe’ investments. While these assets provide stability, they often lack liquidity and may not offer optimal returns.
Rather than avoiding risk, successful investors focus on managing it strategically. Diversification is key and reduces exposure while enhancing returns. AI-driven financial tools now help investors assess risk better, predict market trends, and ensure well-balanced portfolios.
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Passive Income Is Crucial
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Relying solely on salary-based income places a natural ceiling on wealth. No matter how high the paycheck, there are only 24 hours in a day. India’s gig economy and digital landscape have opened doors for passive income generation, yet most still depend entirely on active earnings.
A shift toward independent income streams can unlock financial freedom. Passive investments like dividend-yielding stocks, rental properties, REITs (Real Estate Investment Trusts), and digital assets allow wealth accumulation beyond active work hours. India’s dividend-paying companies, for example, have offered average yields of 2-4 per cent, while rental yields in metropolitan cities stand at 2-3 per cent annually, supplemented by property appreciation. AI-driven portfolio management further optimises these assets, ensuring efficient allocation across different streams.
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Chase Wealth, Not ProfitsÂ
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The surge in retail trading in India—where over 12 million new Demat accounts were opened in 2023—signals a growing appetite for investing. It’s important to remember that wealth creation isn’t about chasing quick profits but about staying the course and allowing time and compounding to work in your favor. The Nifty 50, despite multiple crashes, has delivered an average annual return of around 12-15 per cent over the last two decades.Â
Market fluctuations are inevitable, but wealth is built by staying invested for the long term. Over time, markets recover, compounding works its magic, and disciplined investors see their wealth grow. Instead of reacting to short-term volatility, focus on consistency—investing through all market cycles. With AI-powered tools now offering data-driven insights and portfolio optimisation, staying committed to long-term investing becomes easier, as decisions can be backed by unbiased data.
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The Ultimate Shift: Thinking Beyond Conventional Boundaries
Wealth-building is no longer about following rigid, outdated financial rules. As the financial landscape evolves, so must our approach. Leveraging AI-driven insights, digital investments, and new financial instruments reshapes wealth creation, making it more accessible to everyone.
By shifting from passive saving to active investing, from static thinking to continuous learning, from fear-based avoidance to strategic risk management, from labour-driven earnings to independent income sources, and from impulsive decisions to long-term wealth creation, individuals unlock new levels of financial success.
Because wealth is not just about money – it’s about choices. The sooner these shifts happen, the sooner financial freedom becomes a reality.
(The author is the Co-founder and CEO at Jumpp)
[Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP News Network Pvt Ltd.]
