Wealth Creation of an Individual According to Risk Appetite

Wealth Creation
In the modern financial world, wealth creation is no longer just about saving money - it’s about strategically growing wealth through investments tailored to personal financial goals and risk tolerance. An individual’s risk appetite is central to determining which investment paths are appropriate and sustainable.

Risk Appetite
Risk appetite varies from person to person based on multiple factors such as age, income, education, financial responsibilities, and personal experiences. While some investors prefer the safety of traditional instruments like fixed deposits, others are comfortable navigating the volatility of equity markets for higher potential returns. Understanding how risk appetite influences financial decisions is crucial for designing effective investment strategies. This project delves into the dynamics between an individual's willingness to take financial risk and their long-term wealth accumulation.

Wealth Creation and Risk Appetite
Wealth creation is a fundamental financial goal for every individual. However, the approach to achieving this goal varies significantly based on one’s risk appetite - a personal measure of tolerance for uncertainty and potential loss in pursuit of financial returns.

Focus on Wealth Creation
While all of us here on this forum focus on credit card aspects, it is more important to focus on wealth creation. With some tricks one can gain a few % points on credit card spends, if one aims for wealth creation, one can indeed forego these paltry % points, and gain wealth many times over.

Study on Wealth Creation Based on Risk Appetite
There have been many studies already done in the world to connect these two aspects - wealth creation and risk appetite. Both are indeed connected. There are other factors also which come into play like age, income, financial goals, etc. From various open sources (websites, books, etc) a study on the subject has been carried out.

Types of Investors
The study is structured to analyse three categories of investors: low-risk, moderate-risk, and high-risk takers. Each group exhibits distinct investment behaviours, preferences, and portfolio allocations, which directly impact wealth creation potential over time.

Contents
The study is about 45 pages long. Most of the study is sourced from open source. The same are mentioned in references and bibliography. The contents are as under:-

Chapter No	Topic​	Page No​
-​	Executive Summary	1​
1​	Introduction	3​
2​	Objectives of the Study	7​
3​	Scope of the Study	8​
4​	Research Methodology	9​
5​	Literature Review	11​
6​	Data Analysis and Interpretation	15​
7​	Key Findings	18​
8​	Sample Case Studies	29​
9​	Recommendations	34​
10​	Conclusions	41​
11​	References and Bibliography	43​

Key Findings
Key findings highlight the importance of aligning investment strategies with risk tolerance, life stage, and financial goals. Diversification, systematic investing, and behavioural awareness emerge as critical success factors for wealth creation. This study offers practical recommendations for investors and financial advisors to foster disciplined, informed, and goal-oriented investment decisions and to build customized wealth creation strategies based on their unique risk tolerance, with the goal of achieving financial independence. Key findings indicate that aligning investment strategies with one's risk profile is essential for sustainable wealth creation. Moreover, financial literacy and guidance play a pivotal role in helping individuals evolve their risk appetite as their financial situation matures.

Final Thoughts
Wealth creation is a dynamic journey influenced by an individual’s willingness and ability to take risk. This study affirms that a tailored, disciplined investment approach aligned with personal risk appetite and financial objectives is the most effective way to build and preserve wealth. Ultimately, investor education and professional guidance can empower individuals to make informed decisions, mitigate risks, and optimize returns in their pursuit of financial security and growth.

Conclusion
I hope this study will be of some use to all the people looking for wealth creation. The study provides basic insights and perspectives without going into the details or specifics. It is aimed at giving general and fundamental insights into wealth creation based on an investors risk appetite.

Hope this is of help to some of us. 🙂

 

[hender]

There are people like this as well. A case study for you here @Virtual King

You can re- post here, for everyone to read real life story...may be it will help many for F.I.R.E.

 

[hender]

Link of two more Master's Story:

@big_bull

B

Thread 'Earning of Rs.4.65 Lakhs in a year using cards from Tax payment alone'

May 10, 2025

Dear All,

Sharing an achievement that you may find inspiring. At the closure of FY25 (April 2024 - March 2025), I figured out that I paid around 68 lakhs in taxes and earned back 4.65 lakhs. No need to raise eyebrows at the 68 lakh tax liability—most of it comes from capital gains on equities. Being a fund manager, managing an AIF and running an equity advisory business, I set an internal target of generating 1 crore/year tax liability from personal equity investments (separate from company). The 1 crore target fell short in FY25 due to market corrections in H2FY25. Nevertheless, the tax...

• big_bull
• cards payment reward tax
• Replies: 36
• Forum: Super Premium Credit Cards

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@king of the kings

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Thread 'HDFC Infiniti Account Upgrade Fulfilled in 45 days | Opening Experience | Discussion'

Feb 22, 2025

Hi all in december last week i approached nearest hdfc bank branch and asked them for infiniti bank account (i dont have any hdfc account) iam looking for direct infiniti account opening, the branch bm told fist they will open a account in imperia and upgrade in few days, iam ok and opened account , but surprisingly i have received platinum account,i called the bm he told for their branch they can open this account and next to imperia and then it can be upgraded to INFINITI after fullfilling 5cr Trv , i have accepted it and after few days they sent email and sms to accept for imperia, i...

• king of the kings
• account bank account hdfc hdfc bank hdfc bank account infiniti upgrade
• Replies: 144
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• 
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[Virtual King]

There are people like this as well.

As perfect a financial life as one can get.
All financial aspects taken care of. No major financial challenges. No immediate financial goals. Absolute financial bliss.
Touch wood. 🙂

 

[hender]

Another story of a new intern who picked Zomato at 304, than it fell to 200, still holding...and will sell @ 350+

At a time his portfolio was 2x which fell to .5 now close to .85
(His allocation is not equally distributed)

Now coming to original one, he is not a trader by nature. He knows very well - you can't buy @ bottom & Sell them @ Top.

He sold eternal/Zomato despite knowing results are tomorrow...
352.65.
Very clear thought process and decision making at such a young age.

 

[Virtual King]

Very clear thought process and decision making

Yes indeed.

My Experiences
In my case I too have some strategies which I implement quite frequently. Sharing some of my experiences here.

Profit Strategy
When I invest, I have a profit target in my mind. Say Rs 1L profit. So, when I hit this profit target, unless the momentum of the stock is indeed very strong and is clearly evident, I generally quit and book my profit - whether STCG or LTCG, it doesn't matter. I have successfully implemented this strategy many times in many different stocks. This strategy has given me good profits - both LTCG and STCG.

Time Strategy
Another strategy is to invest for say 6 months or 1 Year. So, at the end of say 367th day (catering for the leap year too), I book the profit, however small it may be on that day. If it's a loss, then I generally give it some more time - say 3-6 months - to see if it will be profitable. I then book the profit however miniscule after another 90 or 180 days. If it's still a loss, then I let it hang around for some more time and consider tax loss harvesting and then take a call accordingly in March of that FY.

Momentum Strategy
Here, there are no fixed timelines or profit targets. This strategy is for momentum stocks which are in strong uptrend. I follow this for a very short time period - say 10 - 90 days - for momentum stocks based on technical analysis and the uptrend. This strategy too has given me good profits. Sometimes, even within a span of a few days.

Range Strategy
This strategy is used for sideways stocks which are range bound for a long time. I observe and fix the range and then buy at the lower range (support level) and try and sell at upper range (resistance). This strategy too has given me good profits.

So, I have planned for different situations with different strategies. Strong disciplined approach always.
Profit or loss thereafter, as per the dictates of Lady Luck.

Hope this helps. 🙂

 

[hender]

So, I have planned for different situations with different strategies. Strong disciplined approach always.
Profit or loss thereafter, as per the dictates of Lady Luck.

Hope this helps. 🙂

Fantastic and real experience sharing,
LUCK plays Lead Role many times ▶️👍✅

 

[KGSIPO]

Yes indeed.

My Experiences
In my case I too have some strategies which I implement quite frequently. Sharing some of my experiences here.

Profit Strategy
When I invest, I have a profit target in my mind. Say Rs 1L profit. So, when I hit this profit target, unless the momentum of the stock is indeed very strong and is clearly evident, I generally quit and book my profit - whether STCG or LTCG, it doesn't matter. I have successfully implemented this strategy many times in many different stocks. This strategy has given me good profits - both LTCG and STCG.

Time Strategy
Another strategy is to invest for say 6 months or 1 Year. So, at the end of say 367th day (catering for the leap year too), I book the profit, however small it may be on that day. If it's a loss, then I generally give it some more time - say 3-6 months - to see if it will be profitable. I then book the profit however miniscule after another 90 or 180 days. If it's still a loss, then I let it hang around for some more time and consider tax loss harvesting and then take a call accordingly in March of that FY.

Momentum Strategy
Here, there are no fixed timelines or profit targets. This strategy is for momentum stocks which are in strong uptrend. I follow this for a very short time period - say 10 - 90 days - for momentum stocks based on technical analysis and the uptrend. This strategy too has given me good profits. Sometimes, even within a span of a few days.

Range Strategy
This strategy is used for sideways stocks which are range bound for a long time. I observe and fix the range and then buy at the lower range (support level) and try and sell at upper range (resistance). This strategy too has given me good profits.

So, I have planned for different situations with different strategies. Strong disciplined approach always.
Profit or loss thereafter, as per the dictates of Lady Luck.

Hope this helps. 🙂

So many strategies mixing will be confusing unless you have a very clear plan

 

[cardio_guycardio_guy is verified member.]

I look at investments in a different perspective. I am a very risk averse person and conservative in my investments.
So my primary goals are to ensure income or cashflow protection. Once there is a visibility that there is enough cashflow to meet the basic needs for the next few years, I think about diversifying investments.

After immediate cashflow requirement is met the next part is to build a solid corpus in debt or fixed income instruments. That is the foundation for other pillars and growth. After these both, the next is to look at equity.

Earlier when I used to invest in stocks, I was getting good appreciation as well as dividends. I used to invest only for the long term and did not sell anything for 5-6 years. But what happens is once the corpus grows to a considerable amount, investing more in one company leads to my biggest hurdle: concentration risk.

Because of the risks involved in my stock selection, I moved completely to index funds. Earlier, I used to track 25-30 companies, their daily movements, announcements, corporate actions and all these things. But now being in MF, I just keep pumping money as and when available. I have found that overall returns are almost the same, and I continue to trust this choice.

As of now, my debt portion is almost 90% and equity is only 10% of the total amount, but going forward, I am slowly increasing the equity allocation.
Good part is achieving a lean financial independence with debt instruments alone. I do not have any allocation to gold and real estate. I am not keen on buying these as well.

Lastly, I have learnt that life is not an excel sheet and a lot of factors influence and decide where we go. None of the plan would work at the most critical time and that's when wisdom plays the most important role.

 

[hender]

Lastly, I have learnt that life is not an excel sheet and a lot of factors influence and decide where we go. None of the plan would work at the most critical time and that's when wisdom plays the most important role.

Summary is the key Essence ✅👍

 

[Wealth is my birth right!]

Someone known to me aggressively putting all of his savings into mutual fund from the past 12-15 years.

Since 2018 both in mutual fund and in direct equity.

Many of his stocks are 2-5-10-20-30-40 X, Obviously few are below IPO/purchase rate as well.

Holding more than 100 stocks in N500 + some Micro and penny stock as well.

Even in 2020 fall and in recent fall he is calm.

I"ll share one example -

Around 150, I asked him to book partial profit in Ola, He said it's investment for long term, "I just have one retail lot of 15k".

Now ola is at 50, much below IPO price, still he is calm, no regrets.

I don't know and don't want to know, exactly how much compounding he is doing...how much he has invested so far in equity/MF....

One thing I know is "He is really a calm investor and that thing is paying him in his wealth creation Journey"

But the time frame of 15 years is not easy for all we will travel through lot of different stages of life so that we book profit for day to day activities

 

[hender]

But the time frame of 15 years is not easy for all we will travel through lot of different stages of life so that we book profit for day to day activities

Yes Sir, True...
Investing ; Longest of Term with Discipline
Trading (Short Term, Mid term)
Intraday/Options
Scalping...
Now Crypto/Mining ⛏️
For each and Every mindset , objective is different, so is the distribution and discipline, around it !!!