Saurabh Mukherjea, Founder of Marcellus Investment Managers
Experts stress the importance of early retirement planning, consistent investing, and understanding the risks and rewards of different asset classes. They emphasize the power of compounding interest and the need for a well-structured investment strategy
Saurabh Mukherjea, Founder of Marcellus Investment Managers
“If you invest a lump sum of Rs 90 lakh at 40 and compound it at a post-tax rate of 10 per cent per annum for 20 years, you will reach a substantial amount. This straightforward path, as outlined, requires clarity of thought and a disciplined approach. However, despite the simplicity and viability of this path, there’s a twist in the tale. Even within our industry, many individuals have intentionally clouded this clear route. Instead of adhering to the straightforward strategy of steadily compounding at 10 per cent, some opt for shortcuts or speculative moves. They might aim for quick gains, attempting to build a Rs 1 crore lump sum between the ages of 40 and 50, potentially exposing themselves to higher risks.”
Sushant Bhansali, CEO Of Ambit Asset Management
“Wealth creation can be for income generation and also for financial freedom. Assets should be working for you. Equity is one of the riskiest asset classes. Invest towards your retirement and proactively do so.”
V. Vaidyanathan, MD & CEO Of IDFC FIRST Bank
“The real risk lies in outliving one’s resources, a situation many face as the number of senior citizens is expected to double by 2050. The cessation of regular income post-retirement makes it imperative to manage expenses meticulously, with even minor charges becoming significant. ”
Ananth Narayan Gopalkrishnan, Whole-Time Member Of The Securities And Exchange Board Of India (Sebi)
“Plans will inevitably evolve, but having a framework allows you to adapt and understand the shifting dynamics of your financial journey. So, as we embark on this odyssey, let’s embrace the mantra of financial planning and navigate the complexities with foresight and resilience.”
Mahesh Patil, CIO-Equity, Aditya Birla Sun Life AMC
“Equities are volatile. There could be periods where they can give negative returns. But as you increase the time horizon in the market, the risk of negative returns goes down. Coming to the risk-return tradeoff - the higher the risk in any particular asset class, the long-term returns there would be better than other asset classes. So, investors looking at investing in various asset classes should understand the risk-return tradeoff, which is there. Normally investors just look at the returns and there is little disregard for risk.”
Navneet Batra, Co-head Of Retail Sales At Bandhan Mutual Fund
“Venkat, Rohan, and Mihir, who started retirement planning at 50, 40 and 30 years, respectively. They all invested Rs 10,000 monthly until the age of 60. At retirement, their accumulated corpus was Rs 25.88 lakh, Rs 1.01 crore and Rs 3.65 crore, respectively. This vast difference was due to their investing period. The longer they stayed invested, the longer they could earn compounding interest. Mihir, 30, earned more compounding interest than Venkat, who accumulated the least wealth as he started only 10 years before retirement.”
K.S. Rao, Head Of Investor Education And Distribution Development At Aditya Birla Sun Life AMC
“During the accumulation stage, one can use the systematic investment plan (SIP) to stay invested perpetually. In the second or preservation stage, one should transition systematically to lesser-risk funds, which means transitioning from higher-risk assets like equities to lesser-risk assets like debt instruments. In the last or distribution phase, they should adopt systematic withdrawal plans (SWPs) to ensure the money is reinvested for systematic withdrawals with modest returns that can last them for a lifetime.”
Deepak Shenoy, Founder And CEO Of Capitalmind Financial Services
“It is very difficult to time the markets and predict. The diversification possible in the stock markets is difficult in other asset classes. In a long-term time horizon, every fall is an opportunity.”
Sankaran Naren, Chief Investment Officer Of ICICI Prudential Mutual Fund
“In the 34 years that I’ve seen markets, the biggest mistakes don’t happen when markets are flat; mistakes happen when markets are at extremes, either at very low or high. In 2020, when the markets were low, people sold their holdings when they shouldn’t have, which was a mistake."
Sarthak Ahuja, Director, NIAMH Ventures
“A lot of them love a work-life balance. So, for that generation, they might prefer having a side gig, and not being subservient to an organisation or an employer just to be able to do things that they like. So, if I say from a Gen Z perspective, the sooner they start saving, the better it may be because, at times, life can be harsh.