Getting rich slowly as an investment philosophy isn't very appealing to many of you who are young. Like in any decade, many want to get rich quick. American legendary investor Warren Buffett lived by that philosophy, and his investment success shows it is possible to retire rich if you have the right temperament. You need the ability to understand the risks and rewards associated with different asset classes. No matter your background, you need to know that.
Investing is about giving your money the right direction and staying put. When we talk about investing, we are largely discussing equity assets. We are not talking about stock market trading within a single settlement cycle in securities like shares, futures, or options. We are talking about investing in companies directly or indirectly and staying invested.
Within investing, there is active and passive investing. A quiet revolution took place in America, with passive funds now managing more assets than active funds. It began in the late 70s and early 80s and has since become a way to invest for long-term financial goals like retirement. The average American household is much richer than those in Europe and Asia because defined contribution plans channel money through passive exchange-traded funds, or index funds.
For decades, equity investing in India was for the few who showed interest, largely in Western India. About 1% to 2% of people bought equity assets in some form. Things changed after COVID-19 when people had time to sit at home and figure out investments. Smartphone-based last-mile connectivity and digital public infrastructure ensured that many more people are now engaged with equity markets. Those who are investing regularly through mutual funds largely adopted active funds to manage their systematic investment plans. Many SIPs shifted to concentrated bets in high-conviction mid-cap and sector funds. Active fund management was seen as the engine of wealth creation.
However, passive investing is reshaping portfolios. From high-net-worth individuals and family offices to retail investors, passive funds like index funds and ETFs are gaining favour. The share of passive instruments within overall mutual fund industry assets under management grew to 18% in September 2026 from 7% in 2020. Indian mutual funds now manage about $900bn, or over $82 lakh crore, in assets.
This is an encouraging sign, as more of you are thinking long term.
India does not have social security the way it exists in smaller, rich European countries. The government in those countries can look after you. If you choose to live in India, you must secure your own retirement. For most people, retirement security comes from either the house they live in or their children. Those who understand financial assets save for retirement through provident funds and pension funds. The National Pension System, or NPS, is a defined contribution revolution. If you are young and salaried, you should embrace it wholeheartedly. The government can intervene and make it simpler for businesses and employees to enrol and manage their retirement plans through the NPS. It means bringing all stakeholders into one room for a day to find a mutually beneficial solution.
If you speak to a professional financial advisor, they can help you put together a retirement plan that helps you retire rich. It is a slow process that requires you to stay on track. Assuming you are 25 and plan to retire by 50 or 55, you can work on a slow-and-steady get-rich plan. If India’s economy is expected to grow at 6-7% each year, companies riding on that growth typically grow profits by at least twice that. Share prices usually move in tandem with the profit growth. Passive investing may not give you instant gratification. However, it will help you retire rich if you stay invested long enough.