The only real way to create wealth and beat inflation (maintain your lifestyle) is by becoming an Owner. The only other way is to become the Loaner (Lender) who is charging exorbitant rates of interest. So, unless you are a credit card company charging 36% interest or a Loan shark, this is not even an option for most people to create or even protect wealth. Sadly, many people choose the path of becoming a Loaner to a Bank for 0% to very low rates of interest. Yes, I know a Fixed Deposit gives a false sense of security by not seeing values go up and down but that is another story (will not get into it in this post).
The reality is that it is so easy to become an Owner without any of the thousands of headaches of running a business. The best part is that you can own a portfolio of companies across the world by investing as low as Rs.500-1000. There is no real excuse for not doing this other than financial illiteracy. The power of owning a portfolio of companies over 20+ years can help individuals and families achieve their long-cherished goals and dreams.
Industry jargon is a fixture in finance and wealth management. Despite what advisors may believe, many clients are not equipped with the education necessary to understand much of the industry jargon.
For instance –“equities” versus “fixed income” investments. Equities are the concept that you purchase a piece of, or a share in, a business making you a part owner of the business – an “owner”. Fixed income is where you loan money to a business or government – becoming a “loaner” to that government or business. There are benefits to each approach depending on your risk profile and short and long term needs. Below are some of the attributes of being an owner versus a loaner. It is our job to find the right balance for each of our clients long-term and short-term needs.