Mastering Wealth

You earn. You manage. You protect. That’s easier said than done though. Especially under the circumstances when businesses and individuals alike have their eye set on wealth erosion and wealth protection rather than wealth generation.

But wealth is really in the eye of the beholder. Nothing is more awe-inspiring than super wealth generators. They remain THE role models to emulate in democratic, free economies. In the past five years, Reliance’s Mukesh Ambani, Bajaj Finance’s Sanjiv Bajaj, Minda Industries’ Nirmal Minda and GMM Pfaudler’s Ashok Patel have made investors and themselves far wealthier than their peers. Coupled with some equally impressive wealth creation at HDFC Bank, The Titan Company, Deepak Nitrite and Alkyl Amines, they represent the cream of the money spinning super-large, large, medium and emerging enterprises in the country today. Ambani has made investors — and himself — wealthier by 4.5 times since 2015; 2.5 times during just the lockdown. Read their stories starting page 18.

Next, even though crystal- gazing is a risky proposition when the future is so uncertain, which firms will generate wealth in the future can be still gauged with deep data intelligence and smart exclusions. Consider our list of ‘ value stocks’ with potential to continue the good run into the future. They have grown faster than the industry while maintaining higher return on equity vis- a-vis peers. Their track record may give you confidence about their future. Rashmi Pratap brings you the chosen ones on page 52.

Just as important as wealth creation is the prospect of wealth management and protection. It’s easier to generate wealth, but far more difficult to manage it. Managing it responsibly is the mantle increasingly being taken over by Family Offices — the newest concept in the progression from the age- old munim to HUFs to Trusts to holding companies. They not just manage investment and properties with an aim of enhancing wealth but, more importantly, ensure smooth inter- generational transfer. Nevin John explains why glamorous Family Offices have some very complex nuts and bolts.

To fathom life beyond equity as an asset class, dive into the world of bonds, alternative investments and asset classes such as gold, real estate and commodities in the following pages.

Finally, on to protecting wealth. For those invested in debt, it’s a Hobson’s choice. Real interest rates are already in the negative zone because of high inflation and falling interest rates. And with regulator RBI indicating it’s not reached the end of the rate- cut cycle, they’re likely to stay in the negative territory for some time. So, where should they invest? Tread carefully, but don’t lose heart. There are options in fixed deposits, company deposits and debentures, public provident fund and debt schemes of mutual funds. Returns may be low but are decent under the circumstances. Anand Adhikari lays bare the priorities before investors to protect — even grow — their capital.

Topping these up are expert tips on how to manage risk by age, product mix and asset mix; life and general insurance as wealth protection tools and how to borrow smartly to boost wealth.

Just why we believe this issue could not have come at a more appropriate time. Be wealthy, stay wealthy. Good luck!