Do you aspire to join the ranks of India’s wealthiest? Achieving high or ultra-high net-worth status requires smart investments and strategic financial planning.
Whether you’re a business leader, entrepreneur, or savvy investor, this guide outlines the steps to reaching high net worth status.
Understanding High Net Worth Individuals (HNIs)
Individuals with a net worth exceeding Rs. 5 crores are classified as high-net-worth individuals (HNIs). This group typically includes entrepreneurs, corporate executives, business owners, and other high achievers.
HNIs are further categorized into three sub-groups:
| Type | Net Worth |
| High Net Worth Individuals (HNWIs) | Rs. 5 crore and above |
| Very High Net Worth Individuals (VHNWIs) | Rs. 5 crore to Rs. 25 crore |
| Ultra High Net Worth Individuals (UHNWIs) | Rs. 25 crore and above |
According to Knight Frank’s Wealth Report 2024, India is expected to see a staggering 50.1% increase in UHNWIs by 2028, reaching nearly 19,908 individuals from 13,263 in 2023.
This growth is attributed to robust economic performance and a thriving entrepreneurial ecosystem. Let’s see how you can also become an HNI in India now.
Steps to Become a High Net-Worth Individual In India
Let’s see how you can become a high-net-worth individual in India.
1. Strategic Investment in the Stock Market
The stock market has long been a reliable avenue for wealth creation among many HNWIs and UHNWIs in India. However, achieving success demands a strategic, long-term approach. To mitigate risk, it’s essential to diversify across sectors such as technology, healthcare, real estate, and energy.
Investing in blue-chip and large-cap companies like Reliance Industries, TCS, and HDFC Bank provides consistent growth and dividends. Meanwhile, mid-cap and small-cap stocks offer opportunities for growth and market resilience.
High-growth areas like fintech, AI, and electric vehicles (EVs) present emerging opportunities. By balancing investments between stable blue-chip stocks and innovative sectors, you can build a more resilient portfolio that captures both stability and growth potential.
2. Making the Most of Taxation
A person can take advantage of deductions under Section 80C of the Income Tax Act by using tax-saving tools such as the Public Provident Fund (PPF), Equity-Linked Savings Schemes (ELSS), and the National Pension System (NPS).
In India, if long-term capital gains (LTCG) on shares and equity-oriented mutual funds exceed Rs. 1.25 lakh in a fiscal year, they are subject to a 12.5% tax rate (with surcharge and cess). “LTCG” refers to profits from selling mutual funds or shares held for over a year.
Thus, by using these tax deductions strategically, people can reduce their tax obligations and improve their overall wealth-creation plans.
Invest in Top-Rated ELSS Funds.
4. Develop a Long-Term Mindset
To attain High Net Worth or Ultra High Net Worth status, adopting a long-term mindset is essential, where consistent and patient investing plays a crucial role. A powerful example of this approach is the use of compounding returns, which can be maximized by staying invested for the long term.
For instance, if you invest ₹10 lakh at an annual return of 10%, your investment could grow to over ₹67 lakh in 20 years, even without adding any further capital, all due to the effect of compounding.
The longer you allow your investment to grow, the more significant the impact of compounding becomes. This long-term growth strategy helps build a solid foundation for wealth, steering clear of short-term decisions influenced by market fluctuations. It is one of the key strategies followed by high-net-worth individuals in India.
5. Maximise Income Streams
Wealth creation demands smart investment choices and generating diverse income streams. Relying solely on a single source, like a salary, is unlikely to generate the capital necessary for meaningful wealth accumulation. Instead, consider focusing on entrepreneurship.
Starting a business offers a powerful path to building wealth, particularly within India’s booming startup ecosystem.
With significant investments flowing into technology-driven ventures, the growth potential is vast.
In fact, over 67% of India’s wealthiest individuals are self-made, highlighting how innovative, fast-growing businesses can lead to remarkable financial success.
Conclusion
It takes careful wealth management, investing, and a well-thought-out plan to become a High or Ultra High Net Worth Individual in India. With the right strategies and perseverance, achieving this milestone can secure your financial future and open doors to new and exciting possibilities.
With the right strategies and perseverance, achieving this milestone can secure your financial future and open doors to new and exciting possibilities.
This is where the Dhan app comes into play. Dhan empowers you with the tools and resources to invest smartly and manage your wealth effectively.
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