On the 19th of December, 2015, Ms. Smruti Patwardhan, the CEO of Ekkalavya Academy of Wealth Creation, educated 46 MMS students of Sir M. Visvesvaraya Institute of Management Studies & Research, Wadala about how to invest money in order to create wealth in the long run.
Wealth = Assets (What we own) – Liabilities (What we owe)
In order for a person to be wealthy, he/she should have more of assets than liabilities. The speaker stressed upon the term ‘Financial Freedom’ & emphasized that Wealth Creation is not the end of the process, but the process itself.
What will wealth do for you?
- Take care of financial needs in the future – irrespective of income
- Cover medical emergencies
- Assure financial freedom
All this leads to a Healthy & Wealthy Life!
Ms. Smruti highlighted the need for a sound body & mind in order for one to create wealth.
Wealth creation process has 3 stages, she stated – Learning, Saving & Compounding (which is the 8th Wonder of the World according to Albert Einstein). The dynamic CEO emphasized the need for one to become a Sensible Investor who invests a sum of Rs. 1,000/- every month in order to create wealth over 20 years. She highlighted the need for Disciplined Savings (i.e. 25% of income to be saved every year!)
The speaker gave the MMS students the formula for Creating Wealth = KSP3 (Knowledge, Skill, Psychological framework, Patience & Period, Practice). All the students were given some additional information about Mutual Funds & its effectiveness in terms of Wealth Creation.
Ms. Patwardhan emphasized that the key ingredient in Wealth Creation is Patience! One has to stay invested for atleast a period of 25 years to create wealth. Warren Buffet, the most successful investor in the world & Rakesh Jhunjhunwala (the Warren Buffet of India), are live examples of Patient Investors who stayed invested in the market & created wealth over a period of 20-25 years.
The session was a great success & the students took away one important lesson – Save & Invest Wisely! Let money work for you & not the other way round.