Wealth Creation

The term 'wealth' has different meanings. Wealth could be the total assets of an individual after deducting his liabilities. It could be the total sum that an individual owns or possesses. But for an investor, it simply means significant returns on the investment. Wealth fulfills the dream of an individual. Therefore, an individual may be termed wealthy if he owns enough to meet his requirement.

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It is the essential requirement and benchmark to call a person wealthy. Hence, an individual who possesses a substantial amount will be said to be a wealthy person. But how does a person gain wealth? The answer is short and straightforward. A person becomes wealthy by making the right investment and allowing wealth to multiply. 

Process of Wealth Creation

An individual might have several financial goals at a given time. In addition, he may possess multiple short-term and long-term financial goals. For example, he may want to save money to purchase a new car or make a down payment on a new house. Therefore, he cannot grow his assets unless he fulfills these goals. So, to create substantial wealth, an investor needs to follow the appropriate procedure to accomplish every financial plan.

Here is the process for wealth creation.

  1. Selection of market

    Investment in a suitable scheme is crucial for the growth of wealth. At the same time, an investor must select the appropriate market or investment plan to invest the savings in order to generate good returns. In addition, the investor should analyze the risk factor involved in a scheme to mitigate the losses on the investment. On top of that, the investor needs to ensure more profits or returns to increase his asset. Further, the reduction of liability is one more critical aspect of the growth of wealth. It could be ensured by paying off debt.

  2. Terms of plan

    An investor must decide the term of the plan to make the investment of his funds. There are various terms for plans known as short-term, medium-term, and long-term. In order to opt the long term planning, an investor should be consistent in paying the premium, or all his efforts may need to be revised.

  3. Evaluation of saving

    Before investing in a plan, an investor must evaluate his savings since all plans are unique in nature. No two plans can be said to be altogether identical. Every plan requires a different kind of saving. For example, an investor needs at least INR 20,000 on a monthly basis to invest in SIP mutual funds if the goal of the investor is to create around 45-50 lacs in the next ten years. Thus, the plans depend on the saving capacity of an investor.  

Selection of Investment Option

It is essential to select an appropriate and best investment option for the creation of wealth. There are various investment options available for an investor to make an investment. For example, Unit Linked Insurance Plan, also known as a ULIP plan, is considered one of the best financial instruments that offer individuals insurance coverage and investment opportunities. The investor under ULIP plans may decide on the market to invest his savings. On the other hand, he may also obtain life insurance coverage for himself. On top of that, an investor may also opt for SIP (Systematic Investment Plan) and enter the world of mutual funds.

How ULIP helps in Wealth Creation?

ULIP offers dual benefits to an investor in a single premium charge. It provides insurance coverage policies as well as investment options that help in the advancement of wealth. 

To create wealth under ULIP, the investor needs to keep the following factors in mind:

  1. Start as early as possible

    The investor should start investing as early as possible to gather more funds in retirement. Starting at an early age refers to the long-term investment which maximizes wealth and offers substantial returns on the policy. So, the investor must take the optimum benefits at a young age. 

  2. Invest in the right market

    ULIP allows the investor to make an investment in his choice of market. Therefore, the individual, as per his will, chooses the most appropriate market according to the condition of a particular market. For example, if the investor has a high-risk appetite, he may select an equity fund and invest in that market. On the other hand, if he wishes to ensure the security of his funds, he may opt for debt instruments by investing in government bonds. In addition, he may also reduce the risk by selecting the balanced fund, which offers moderate risk and considerable returns on the investment.


Wealth creation is undoubtedly a great idea to gather substantial funds to meet financial requirements. However, it is a continuous process that needs consistency to make the investment. The investor needs to save money from his overall income to invest more. There are various categories available for an individual. He may choose any type and select a suitable scheme to invest therein. In addition, an individual earning a substantial amount may invest in more than one market to make a significant return and lower the probability of losses.


  • What are the most important factors for wealth creation?

    An individual majorly requires two important factors to create wealth.
    • A sustained saving
    • Consistency in paying premiums
  • How much do I need to invest in order to make a corpus of four crores in 20 years?

    There are two investment options an individual may consider to invest, first in fixed deposit and the second in Flexicap funds.
    Under the first plan, an investor may deposit INR 86,150 on a monthly basis and get an annual return of 6% for 20 years. If the investor is consistent under this plan, he can earn INR 4 crore in 20 years. 
    Under the second plan, an investor may consider investing INR 40,035 monthly to get 12% annual returns. In this way, he may earn a corpus of four crores in 20 years.
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