How to preserve and grow wealth like the rich
There was a time when investing was considered the exclusive domain of the wealthy. Few knew about innovative ways to put their money to work, and even fewer acted on those clever ideas. Over the past decade, India has witnessed a rapid democratisation of financial services. There has been a significant inroad made into adding new investors to the banking and stock market systems. The last mile connectivity is at a level unthinkable twenty years ago. Using smartphones with a Unified Payment Interface (UPI) facility enabled, those in the financial services sector in the Indian market have a chance to reach 500 million or 50 crore people directly. Currently, the number of active clients on the National Stock Exchange is 4.2 crore, while the number of unique investors through mutual funds is only 5.5 crore. That is according to the latest draft IPO filings with the Securities and Exchange Board of India by Groww, a digital stockbroking and financial products distribution company.
There is very little or no excuse for any individual making an honourable income not to save and not invest. There can be no complaint that saving and investing are only for the rich. If you have a monthly income and manage to save even Rs 500 per month, you can put it to work and create a moat for your fortress. A primary task is to save more money than spend. Any further conversation on investing is possible only if you can save every month. The Securities and Exchange Board of India has eased rules to ensure that you can plan your finances better than ever before.
Earlier this month, Sebi allowed Real-Estate Investment Trusts and Investment Trust Funds to be categorised as 'equity'. A small change like that opens up immense possibilities for your money. You can now deploy your savings into the real estate sector and get capital gains tax benefits like those applicable to equity assets. Mutual funds already have multi-asset funds. There is a growing interest, which is further boosted by this change. If you are risk-averse and do not wish to put all your savings into a particular asset class, you have more power to diversify your risk now.
The wealthy follow the practice of alternative investments, which they do through alternative investment funds (AIFs). Such funds provide access to non-traditional asset classes, including unlisted equity, private equity, venture capital, real estate, and infrastructure assets, thereby enabling portfolio diversification. Over the past decade, the market has witnessed a significant expansion in these investments. As of March 2025, Rs 5.6 lakh crore is invested in 1,526 AIFs registered with Sebi. That number was just Rs 9500 crore in March 2015, managed by 135 registered funds, according to the Groww IPO document.
For a long time, there was no other category between mutual funds and AIFs. Sebi has now created a specialised investment Fund (SIF) as a new category to boost wealth management among the middle classes. The minimum threshold is now Rs 10 lakh in investments. That means you need Rs 10 lakh surplus cash to start managing money like the rich. With artificial intelligence and data science, wealth advisory firms can now create a customised portfolio for your needs. The most critical aspect is understanding the market risk. The primary target for anyone starting to invest should be to create an investment portfolio of Rs 10 lakh. That is possible through regular investments made through mutual funds or directly. Once you reach that limit, you can hire a wealth advisor who can then manage it according to your needs.
Just like the rich, you can not only protect your wealth but also look for growth in alternative asset classes.