What are the investing strategies young investors can follow for long-term wealth creation?

Around two decades ago, one gram of 24-karat gold used to cost around AED 65 in Dubai. It has now risen to AED 550 in January 2026. The same pattern goes for almost all other items – from cars to houses, and food to clothes. This gradual increase in prices over a period of time is referred to as inflation, and it leads to drop in value of money that you hold in your locker or bank.

In other words, the real value of money is not indicated merely by the number it denotes but by its purchasing power. If the money you hold can buy you a two-room flat now is unable to buy the same house 10 years later, it means the value of your money has lost some of its value. There is a simple hack to prevent this loss, and it is known as ‘investment’.

Anyone who wants to prevent the loss of value of his money is supposed to invest a part of savings to meet long term financial goals which could range from buying a house to saving for retirement. Since the entire process of wealth creation takes a long time, it should, therefore, begin at a young age.

We give a lowdown on the five-step journey that can help you meet your financial goals:

I. Savings: At the outset, young investors should inculcate the habit of saving on a regular basis. It’s only when you save a certain percentage of your income that you are in a position of making an investment. Saving is to investment what cooking is to eat. Unless you save, you won’t be able to invest anything? Therefore, it is vital to cut down on discretionary expenses to a certain degree so that you have sufficient money every month for investment.

“The most underappreciated advantage in youth is the rate of savings. Lifestyle inflation does more damage than market volatility. Increasing investments with income growth and automating savings matter more than sophistication. High savings with average returns routinely outperform smart investing with poor discipline,” says Vitang Shah, Chartered Accountant and financial advisor based in India.

II. Invest in equity: The key asset class that can change your fortune is equity. It allows you to invest in the securities of companies. The safest long-term investment for a lay investor is index investing. For example, one could consider investing in DFM General Index. The past two-year return of DFM General Index (between Jan 12, 2024, to Jan 12, 2026) is over 52%. This implies an annualised return of 23.29% — which one cannot expect to earn from a bank’s fixed deposit.

Experts also advise that youngsters could contemplate investing in the new-age companies or those entities which have just started their journey in capital markets. This can be done by investing in their IPOs (initial public offer).

Sridharan S., financial advisor and founder of Wealth Ladder Direct, recommends that young investors should consider investing in IPOs, which is a form of long-term investing. “Some new age companies which are into artificial intelligence or quick commerce, for example, have a lot of potential to grow in the long run (10-15 years) even if they are not profitable so far. Therefore, one should identify such companies and invest a small portion of investible corpus into them,” he says.

Sridharan also highlights that one doesn’t particularly need expert knowledge to invest into IPOs. One can simply try to understand the consumption pattern of people around them to make a guess of the growth potential of these companies.

III. Invest regularly via SIPs: Another key investing doctrine tool required to meet financial goals is consistency. Merely investing occasionally does not lead to wealth creation. Mutual funds offer a plan to invest in equal tranches. This method of investing on a regular basis is known as SIP (systematic investment plan). It essentially serves two key purposes. First – it helps you inculcate investing discipline which goes a long way in building wealth. Second – it allows you to invest across different price points, thus averaging out the price at which you acquired shares/ mutual fund units.

For example, if you happened to buy a few units of mutual funds when they were trading at a premium then merely by staggering your purchase over several weeks or months will allow you to buy them at different price points. It is a tried-and-tested way to average out the price at which you acquired those units.

“Time works only if behaviour allows it to. Continuing SIPs during market declines, resisting the urge to time entry and exit, and ignoring short-term narratives create an edge that few investors consistently maintain. Most wealth is created when confidence is scarce, not abundant,” adds CA Vitang Shah.

IV. Journey to wealth creation is not linear: Let us understand one thing very clearly. Investing and wealth creation are not a one-way street where your wealth would go only in one direction: upward. There could be some market cycles when your investment runs into rough weather. Total value of your shares and mutual funds may decline for some time. But these phases would be temporary. There are short patches of headwinds when the value of your securities falls. You should refrain from losing your patience during these phases.

Staying invested is far more difficult than investing itself. As they say Rome was not built in a day, wealth creation also takes its own time. Ace investor Warren Buffett once famously remarked in a letter to the shareholders of Berkshire Hathaway- “You can’t produce a baby in one month by getting nine women pregnant.” So, stay patient and stay invested.

V. Asset allocation: While investing in equity (via shares or mutual funds) is indispensable for creating wealth, other assets such as gold and bonds (debt instruments) are also important for a well-rounded portfolio. The process of combining different asset classes (equity, gold, debt and real estate) is known as asset allocation.

Wealth advisors often emphasise that investors should invest across asset classes in the right proportion based on their age as well as risk appetite so that they can meet their financial goals well in time.

While explaining the importance of fixed income instruments in portfolio curation, Vineet Agrawal, Cofounder, Jiraaf, a bond investment platform, says, “Equities aid in long-term wealth creation, but wealth is not built by investing only for long term and without diversification. Young investors also have short- and medium-term financial goals, such as building an emergency fund, planning for major life events, or saving for a home down payment, etc. These goals require structure and not volatility. That is where fixed-return instruments, such as bonds, play a critical role. Bonds offer fixed returns and capital visibility, bringing structure and balance to a portfolio.”

To sum up, it is vital for youngsters to save a chunk of their income and invest the same into an array of assets. Although equity is most important for wealth creation, other asset classes such as bonds and gold are also crucial for hedging. And if the market cycle turns downward, it is better to stay invested rather than panicking. After all, wealth creation requires patience – loads of it.

Blog Received on Mail