Podcast Transcript

There is more to investing than just generating returns. There has to be a larger purpose. Investing is not a game we play to prove our self-worth. It is not something that can be done casually. But, most of us associate investing with just making money. In the process of trying to make money quickly, we often end up losing our way and landing deep into trouble. This is where appreciating the purpose of investing greatly helps. We invest for strong reasons. We invest to make our future secure. We do it, so we can live well later. We do it, so we can raise our lifestyle in later years. We look to protect loved ones and provide them with the very best in the future.

I just told you why investing must be viewed as something far bigger than just making money. There are some more observations I would like to share from the recent past.

Millions are entering the world of investing. Many are first-timers. Nobody in their family thought beyond a home and a fixed deposit.  Or a PPF. The world of mutual funds was not quite a favourite of the older generation. But, a lot has changed in the past three years.

Mutual funds are seen as a decent investment alternative to other conventional ways. In fact, mutual funds are well on their way to being seen as very conventional. But, mutual funds are not just money-making engines. They don’t make Money all the time. In that sense, they are very different from conventional investments. So, there could be phases of loss. At times, the losses can be quite sharp and hurting. So, it is important to do one’s investing sensibly and away from high risk.

There are multiple ways of managing risk. Firstly, you must know to set your risk levels. Or, find the right people to do it rightly for you. But, without doing this exercise, most people adventure into the world of investing. It is like taking a drive in an unknown territory without a GPS or a map.

You don’t need to take too much risk. You also have the choice of controlling your risk. You can very much move away from risk when it rises sharply.

These are easier said than done. To do it right, one needs to prepare. The preparation begins with thinking of the purpose. Defining goals. Setting expectations realistically. Knowing exactly how to fulfil them. Making sure each goal is fulfilled.

Surely, this is no game. Or fun with money. This is serious business.

To stay in the game, it is never easy. One must take serious effort to stay long in the business of wealth creation. Before you begin, make sure you are in good company and are well advised. Be sure you are managing risks well. Returns will always be the outcome of such an approach.

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