Don’t Keep Money In Bank: Why Saving in Banks Alone Won’t Make You Wealthy – The Art of Building Assets
For generations, Indians have been taught that saving money in banks is the safest way to secure their financial future. From childhood, we’ve been told to work hard, save diligently, and deposit our earnings in fixed deposits or savings accounts. But is this really the best way to grow your wealth in today’s dynamic economic landscape? Recent incidents in the financial world have raised some alarming questions.
The Banking System: A False Sense of Security
The closure of Punjab and Maharashtra Cooperative (PMC) Bank in 2019 shocked millions across India. Over ₹8,800 crores of fraud was uncovered, affecting nearly 9 lakh depositors—many of whom were middle-class families. Despite assurances from the Deposit Insurance and Credit Guarantee Corporation (DICGC), only deposits up to ₹5 lakhs are insured in India.
Now imagine saving your hard-earned money for decades, only to find that your bank has collapsed and you’re left with just a fraction of your life savings. Sadly, this isn’t just a one-off incident. Similar financial frauds and closures have occurred worldwide and closer to home, such as Yes Bank’s crisis in 2020. These events highlight a harsh truth: banking on banks alone isn’t enough to secure your financial future.
What Do Wealthy People Do Differently?
Financial education is the key differentiator. While the middle class tends to rely on savings and fixed deposits, the wealthy build and invest in assets. Assets not only grow in value but also generate consistent income. Renowned author Robert Kiyosaki often emphasizes the importance of creating assets and using other people’s money (like loans) to build wealth. Let’s explore some asset classes that can help Indians diversify and grow their financial portfolio.
Don’t Keep Money In Bank Instead Invest Money In These 8 Assets :
1. Real Estate: The Evergreen Investment
Investing in real estate has always been a popular choice in India. From owning rental properties to purchasing commercial spaces, the opportunities are endless. The Indian real estate sector is projected to reach a market size of $1 trillion by 2030, contributing 13% to the GDP.
For instance, if you invest ₹80 lakhs in a property today, with an annual CAGR of 18.7%, its value could grow to ₹24 crores in 20 years. Meanwhile, you can earn rental income along the way. If buying property seems out of reach, Real Estate Investment Trusts (REITs) offer a more accessible option. These allow you to invest small amounts in commercial properties like shopping malls and office spaces and earn returns in the form of dividends.
2. Fine Arts and Collectibles
India has a rich cultural heritage, and investing in fine arts can be both financially rewarding and fulfilling. Paintings by artists like Raja Ravi Varma and Tanjore art pieces are not just aesthetically appealing but also highly valuable. The demand for such collectibles remains high, as they symbolize wealth and cultural appreciation. Platforms like Wovensouls and auction houses allow middle-class investors to explore this unique asset class.
3. Stocks and Index Funds: Beating Inflation
Inflation in India has been rising steadily, impacting everything from groceries to education. While savings accounts and FDs barely keep up with inflation, the stock market offers a way to grow wealth. For example, the Nifty 50 index has delivered a CAGR of 12–13% over the last decade.
Investing in index funds is a great way for beginners to enter the stock market. With as little as ₹5,000 per month via SIPs (Systematic Investment Plans), you can harness the power of compounding to build significant wealth over time. For instance, investing ₹15,000 monthly in index funds could potentially grow to over ₹6 crores in 25 years, even after adjusting for inflation.
4. The Smart Use of Debt
In India, debt is often viewed negatively, but it can be a powerful tool if used wisely. For example, instead of taking a ₹50 lakh loan to buy a house, consider using the same amount to buy three smaller properties worth ₹20 lakhs each. Rent out two of them to cover your EMIs while you live in the third. Over time, the rental income and property appreciation will outpace the loan costs, creating wealth.
An example of this strategy can be seen in cities like Bengaluru, where rental yields from IT hubs consistently generate steady income for investors.
5. Gold and Precious Commodities: India’s Favorite Asset
Indians have always had a love affair with gold. Whether it’s for weddings or as an investment, gold has proven to be a stable asset over centuries. Even during economic downturns, gold prices continue to rise. Today, gold is priced at around ₹66,000 per 10 grams and remains one of the safest bets against inflation.
Apart from gold, investing in silver and commodities like energy and agricultural products can also secure your financial future. With India’s push toward renewable energy, investing in solar power companies is another avenue worth exploring.
6. Digital Products: The Future of Wealth
The rise of e-commerce and digital platforms has created a new wave of opportunities. From online courses to mobile apps, digital products require minimal ongoing effort after the initial setup. Platforms like Udemy and Coursera allow creators to earn passive income by selling their expertise. Similarly, launching an e-commerce business or a blog can help build a steady income stream.
India’s digital economy is expected to grow from $325 billion today to $800 billion by 2030, making this a lucrative space for investment.
7. Forestry Investments
With growing environmental awareness, forestry investments are gaining traction. Products like bamboo and sandalwood have high demand in industries ranging from furniture to cosmetics. For instance, in Karnataka and Kerala, farmers are earning significant returns from bamboo plantations.
Small-scale investors can explore cooperative schemes like Tree Grow Agro Forestry, which allow middle-class individuals to invest in forestry for as little as ₹25,000.
8. Build a Brand
A strong brand is an intangible asset that generates value for a lifetime. Take the example of Amul, whose tagline “The Taste of India” resonates with millions. By building trust and quality, Amul has created a brand that ensures consistent sales, regardless of market conditions. Whether you’re an entrepreneur or a small business owner, investing in branding can pay off immensely in the long run.
The Bottom Line
The traditional advice of saving money in a bank no longer guarantees financial security. Instead, it’s time to think like the wealthy and focus on building assets. Real estate, gold, stocks, digital products, and even forestry investments can help you create multiple streams of income and grow your wealth sustainably.
Keep only the money you need in the bank and invest the rest wisely. The sooner you start, the closer you’ll be to achieving financial freedom.
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