There was a saying- “Rome was not built in a day”. Likewise wealth creation doesn’t happen overnight! It requires lot of patience and efforts.
But by following some strategies, we can create wealth gradually! For this we have to follow some systematic methods. To create wealth for our loved ones we have to-
- Starting investing at young age– Some youngsters prefer digital assets to wealth creating assets. In their initial earning days, they neglect the words of their elders to save for their future.
But this attitude has to be changed! If you invests early your corpus will multifold due to the power of compounding! This is a sure-shot success to your wealth.
As you have lot of time in hand and have long-lasting earning career, your investment gets interest on interest(compounding). This reinvested interest will do magic in your long career.
If you start investing at 25 and don’t touch the corpus till you retire, you’ll be surely a wealth creator to you and your family.
- Diversify your investments– There is a saying- “Don’t put all your eggs in one basket”. That means you have to diversify your investments across all asset classes(Equity, Debt, Gold, Real Estate etc)
Even you are fond of particular asset class, you shouldn’t allocate all your investments in that asset. You should do proper asset allocation and diversify them. You should do portfolio re-balancing to gain maximum benefits.
- Maintaining Proper Documentation– Some investors invests and forgets the proceeds. While discussing with friends or finding investment bonds while shifting home, then only they get remind of the investments. This is a huge mistake
You should maintain proper documentation of the investments and keep in reach nearer to you which can be accessible easily!
- Review your portfolio periodically– Some people thinks that they invested in a right product and he can relax without worrying for the future. But this goes to be a huge obstacle to your wealth!
In today’s fast growing world, anything would happen! You should check your portfolio at least once a year and if you find any asset class is under-performing, shift that asset to better performing asset.
- Assume your average return by applying Rule No 72 in advance– Before making investment, assume your expected returns by applying Rule No 72.
This Rule No 72 can be applied by dividing the interest rate by 72. The assumed interest rate can be taken from the past performance of the asset class.
If you divide the interest rate by 72, you can get expected duration to reach your goal.Through this rule, you can get a overview on your investment growth.
By following all the above strategies, you can create wealth to you and your family.