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Rising Ultra-Rich in India: Investment Prospects Amid Financial Challenges It is crucial for people with limited earnings to focus on preserving and managing their wealth well

By Sraboni Haralalka

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India is witnessing remarkable wealth creation driven by economic growth, technological expertise, government initiatives, infrastructure development, and geopolitical advantage.

As per Knight Frank's 'The Wealth Report 2023,' India is projected to see a substantial increase in its ultra-high-net-worth individuals, those with a net worth exceeding $30 million, with a growth of 58.4 per cent in around four years. Moreover, the population of high-net-worth individuals possessing assets valued at $1 million or more, is anticipated to surge from 7.9 lakh in 2022 to 16.5 lakh by 2027.

Concurrently, with emerging luxury markets, such as Mumbai, Delhi, and Bengaluru, comes a unique financial challenge: individuals with small earning or short wealth accumulation windows. This category encompasses celebrities such as athletes, film stars, and high-profile business professionals with brief yet lucrative careers. It also includes promoter families who have divested businesses and amassed substantial wealth. With opulent lifestyles comes failure to manage and grow their wealth while maintaining their lifestyles.

While there are many investment choices available in India's investment scene, it is crucial for people with limited earnings to focus on preserving and managing their wealth well.

It is crucial for people with limited earnings to focus on preserving and managing their wealth well

POSSIBLE RISKS

Numerous affluent individuals face the risk of suffering losses as a result of flawed investment decisions or becoming victims of ponzi schemes, whether through investment or endorsement.

Peer pressure, herd mentality, and the allure of following prevailing investment trends can also lead to financial missteps, underscoring the importance of judicious financial management.

For example, from cricketers to Bollywood celebrities, many have ventured into investments and endorsements in startups, leveraging their celebrity status. While government initiatives such as Startup India have fostered an encouraging environment for entrepreneurship, the harsh reality remains that a majority of startups fail. As per an IBM Institute for Business Value study, around 90% of Indian startups fail within the first five years. Additionally, real estate carries its own set of risks, with including challenges such as high cost and tenant risk.

STRATEGIC APPROACHES

As famously remarked by Warren Buffett, "The stock market is a device for transferring money from the impatient to the patient." Patience, diligence, and a longterm perspective are essential for cultivating enduring wealth.

Keeping abreast of market trends and developments is imperative for making well-informed investment decisions. For individuals who accumulate wealth in short periods and have busy lives without much financial expertise, managing and growing wealth can be challenging. Therefore, it is essential for them to seek guidance from trustworthy wealth preservation and creation advisors who understand market dynamics. These advisors can develop personalized investment management plans tailored to their clients' circumstances, goals, and risk tolerance levels.

By making informed decisions and seeking expert guidance, those with limited wealth accumulation timelines, can confidently navigate the complexities of investment management, paving the way for a prosperous future.

Sraboni Haralalka

Co-Founder and Executive Director, Wode House Capital

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