Have you ever think why some people are only getting rich? Because they follow some basic financial strategies and as a result they are becoming rich!
Do you want to know the secret to become rich; simply follow these basic principles-
- Invests the surplus money beyond your contingencies in high capital appreciation assets– Some people keep thousands, lakhs of rupees as idle in bank savings a/c. But the real rich don’t do like this!
Rich People keeps some money for emergencies in liquid funds and overnight funds which gives slightly better returns than bank savings a/c. Besides this, overnight and liquid funds can be easily redeemed anytime where the proceeds would be credited in their bank a/c’s within few hours.
So to become rich, normal people should invests their surplus money in bonds and mutual funds which have the capability to give better returns than the bank savings a/c.
- Track your expenses even a minute amount– Some people won’t track their expenses daily. Instead they are in mis-belief that they can save what is left after spending! Without tracking expenses your budget won’t be in your control. By tracking expenses you can get an over-view on where you are over-spending and the areas where you could reduce spending in the coming months!
In today’s digital world, there are many apps that could record all your spending habits and gives an automated view of category-wise expenses. Make use of them!
- Changing Mind-set to spend only on “Needs”– Rich People spend only on necessities and make use of the surplus money to invest. If you want to be rich, spend only on “Needs” rather than on “Wants”. Do remember wants gives temporary pleasure which is a great obstacle to your future. So from here-on-wards, try to spend only on Needs.
- Know the pros and cons before investing– Rich people invests only after a thorough research. After they understands the risks and rewards associated with the investment, they conclude whether to invest or not!
Likewise, don’t follow the marketing tips from media sources and firms, instead do your own research, analyse the risk-reward ratio and if you think it is fit for you, then only invest.
- Set Financial Goals and search for the ways to achieve them– There is a saying- ” A Goal without a plan is just a Wish”. Simply wishing to be rich is not sufficient, you should plan for that goal. You should search for the various investment avenues and identify the right product to achieve that goal. This is a part of the financial planning where rich people assume it as their first priority.
- If you are unable to do savings, set “Auto-Pay” in the first week of the month itself– Generally salaried-class tend to spend heavily in the first week of the month once their salary credits. But after weeks pass-by they feel difficult to survive with that limited salary after spending.
To avoid this, set “Auto-Pay” instructions to debit amount from your bank a/c and transferred to investments. This is the best way to save money as it inculcates “Save First and Spend the Rest” concept
- Taking Care not to miss even a single instalment failed(Auto-Debit Failed)– As the primary intention of auto-debit is to limit your expenses and transferring your savings into investments, missing a single instalment would ruin your compounding power. By following financial discipline, you could see your money multi-folds due to power of compounding!
Rich people takes extreme care in managing their finances. With their self discipline they became rich. If you want to be one of them, follow the above steps and create wealth for you and your family!