Mastering the art of financial and wealth management | Sunday Observer

Mastering the art of financial and wealth management

10 September, 2023

Effective money management is akin to an art form, one where we rely on financial institutions to guide us toward opportunities that maximise our investments. While many tend to focus on retirement planning as they near their golden years, the truth is that such foresight should have been cultivated much earlier. The pursuit of increased wealth is a universal endeavour, regardless of one’s income bracket.

At the heart of ‘wealth management’ lies a holistic approach to financial planning, encompassing both short and long-term investments. It entails preparing for various life stages, from educational expenses and medical emergencies to sabbaticals and the twilight years of retirement. To navigate the complexities of wealth growth, it’s crucial to grasp the ever-present rhythm of inflation, which serves as the backdrop to informed decision-making.

In this pursuit, smart investments in real estate, timely investments inTreasury bills, and the security and high returns of FDs are among the avenues worthy of exploration. Managing assets wisely, particularly in the face of economic challenges, is important. Furthermore, seizing business opportunities that align with favorable exchange rates can prove highly beneficial.

Embarking on this journey of financial enlightenment not only secures one’s future but also opens doors to prosperity in an ever-evolving financial landscape.

Fostering the savings habit

Individual savings accounts often form the bedrock of our financial upbringing, with parents instilling the habit of saving money in a bank from an early age. This practice is a legacy that we carry with us into adulthood, passing it down through generations. However, there’s an opportunity to elevate this tradition and promote the collective well-being of the family’s finances.

Imagine encouraging grandparents and close relatives to contribute to an education fund on special occasions, thereby nurturing the overall wealth health of the family. This can be facilitated by establishing a dedicated children’s savings account tailored to their educational aspirations. By consistently making deposits to mark each milestone in a child’s growth, you not only ensure the fund’s continuous growth but also set a compelling example for a financially secure future.

Exploring added value

Much like the fluctuating stock market, our health can be unpredictable. In response, some employers provide a valuable professional perk—a complimentary health insurance plan. Similarly, NDB Bank extends this generous benefit to savers with no premium fees. These insurance plans are structured in tiers, offering coverage for the value retained in the accounts. Some policies go a step further, encompassing not only the account holder but also immediate family members.

When it comes to children’s savings accounts, they bring an array of enticing benefits to the table. These include cash rewards for academic excellence, seasonal gift benefits that support educational and recreational needs, and the allure of higher cumulative interest with timely cash bonuses.

Investment and savings

Banks and financial institutions present a spectrum of savings options, ranging from traditional avenues like FDs and treasury bills to more dynamic opportunities such as stock market investments, including equity and short-term debt. Among these, money market funds, commonly known as mutual funds, are designed to give a higher yield compared to static savings accounts.

Some institutions offer hybrid solutions, providing customers with a versatile array of product choices. Mutual funds, in particular, offer the advantage of risk diversification, capitalising on broader market access for potential gains.

For added convenience, banks may have an investment banking arm that is secured by the bank, this makes accessing non-traditional financial services through the same organisation you already bank with much easier and free of transaction fees.

Traditional savings strategies

FDs and savings planner accounts present a versatile range of advantages tailored to individual requirements. Consider, for instance, a foreign currency deposit account, essential if your funds originate from overseas sources. On the other hand, if your goal is to save with regular monthly contributions, options like the NDB Savings Planner or Real Saver accounts may align with your objectives.

For those seeking the added benefit of a loan facility, the NDB Vismitha Savings Account offers you the option of a zero percent interest loan.

Ask the right questions

While traditional savings methods like FDs and super savings accounts may seem straightforward, the transition to non-traditional savings through mutual funds can appear daunting, especially for newcomers to investment platforms. To ensure a well-informed decision, it’s essential to pose the following critical questions before making the shift from traditional to non-traditional savings:

1. Does the fund align with your financial goals?

2. Does it offer a consistent income stream that matches your timeline?

3. What are the associated risks, and how does the potential return correlate with these risks? (Typically, higher returns often entail higher risks, but a reputable organisation can instill confidence in your investment.)

4. What is the historical performance of the fund?

5. Are there any hidden fees or transaction charges? Make a comparison with other funds.

6. Who manages the fund, and what is their reputation in the industry?

Selecting your investment partner should involve a comprehensive evaluation of an array of services they offer, reflecting a long-term commitment. In today’s banking landscape, digital banking platforms present a notable advantage, empowering you to monitor your accounts at your convenience and make timely, well-informed decisions. NDB NEOS which encompasses the Bank’s Mobile and Online Banking platforms, stands as the Bank’s premier digital offering, providing a host of banking solutions to customers, ensuring ultimate customer convenience.