Who doesn’t want to be wealthy? Everyone strives to attain financial freedom but very few truly have clarity on how to actually reach their financial goals. We are sure that by now you have realised that no one has ever got rich while only working hard in their 9 - 5 job.
It’s obvious everyone wants to get rich and in this article we have made an attempt to help you design a path to create immense wealth based on the strategies practiced by the rich and successful.
Avoid Debt at all costs
Debt silently eats up your earnings. It might appear highly tempting to have the flexibility to purchase luxury in Easy Monthly Instalments, however it can soon accumulate into an alarming liability.
It’s essential to understand that having financial flexibility in the form of Credit Cards and Personal Loans can be useful in times of emergency, however one should always keep these instruments as a last resort.
Primary reason to consider is their sky high interest rates which range from 15% to 25% per month plus taxes. Therefore its best to avoid these liabilities that can put a huge dent on your earnings.
Prepare Emergency Fund
As the term suggests, an Emergency Fund is created to safeguard one’s financial needs in times of adversities.
Emergency Fund is basically a financial cushion that will enable you to absorb any unforeseen financial pressure. It will ensure you don’t accumulate any unwanted debt and will ensure a certain level of peace of mind during these challenging times.
In an ideal situation if you are a salaried personnel, it should cover 3-6 months of your household expenses including any Debt repayment like EMIs etc. On the other hand if you are a business person, your savings should cover at least 6-12 months of your essential expenses.
Invest Wisely and Efficiently
Once a wise man said, the best time to start investing was when you were 18; and the next best time is today.
However, many wonder how to begin their investing journey and how much capital they might require.
A simple answer to both of these questions is by beginning with basics and easily available low risk options. Let us provide you with an example to help you understand better.
Majority of us have heard about Mutual Funds but very few of us understand it. One of the most efficient ways to start investing is by opting for SIPs or Systematic Investment Plan where you can begin investing with merely ₹500 per month.
Second aspect to consider is the clarity of your financial goals so that you can gain most from your investments by reinvesting your returns. This helps you take advantage of the compounding factor that is when you earn returns over the returns you have already earned.
Conclusively, if your desire is to get rich & create an enormous amount of wealth, then it’s essential for you to realise that it’s absolutely achievable. All you need is a disciplined & well strategized approach which will enable you to gain best possible returns from your hard earned money.
Remember, the rich don’t just work hard but they make their money work harder.