- 01.SAVING WILL NOT MAKE YOU WEALTHY?-?Unless you are saving a few lakh rupees every month you will not become wealthy by just saving some money. You need to use that money in a better way to convert it into wealth. Having cash is good as a contingency fund – something happens to your regular income – like you lose your job or something, it is good to have between 6 to 12 months of savings in cash – this will help your survive the bad patch. Cash will also help you encash an opportunity. Having cash will help you grab a opportunity like a business or help you negotiate something in your favour.
- 02.BEING WEALTHY IS NOT ABOUT SHOWING OFF?-?If you have a lot of wealth, it does not mean you will have to own a big house or a luxury car. Being wealthy is about having assets. Assets are things like business or investment that bring additional cash flow or interest to your income or which appreciate in value beating the inflation. Showing off can lead you to acquiring things like cars that actually drain your pockets. Owning a big house just to look rich can cause you to pay a major portion of your income into EMI payments for decades. One of the classical definitions of being wealthy is how many days can you survive if your income stopped tomorrow. The longer you can live, the wealthier you are.
- 03.UNDERSTAND TAX?-?Many people worry too much about taxes. There is more fear rather than understanding about taxes. Instead of making taxes work in their favour people are busy finding ways to avoid them. To master money, you have to use taxes for your benefit and not against you. Find out how you get tax breaks so that you can save money, invest it and save even more taxes. Learn to use taxes so that you keep more money in your pocket legally.
- 04.LEARN HOW TO USE OTHER PEOPLE’S MONEY?-?Many people are so terrified of using loans, that they use their own money for everything they do including business. Loans maybe good or bad based on how you use them. For example, if you had a housing loan and wanted to get an education loan for your kid, it will make more sense to use a top up loan on the existing housing loan as it will be at least 1.5% cheaper. Or most people do not know that by investing properly you can actually reduce the interest on your housing loan by 50% or more.
- 05.EARN MORE AND SPEND LESS?-?We need to focus on both at the same time. Make yourself an asset in your job or your business, upgrade your abilities continuously and strive to become a better person every day. This way you increase your chances of earning more. As your income goes up, keep your expenses low. Most people find this difficult to do and end up increasing their expenses in proportion to their incomes.
- 06.KEEP TRACK OF YOUR CASH FLOW?-?Most people are good at making money but struggle with keeping the money in their pockets. The reason for this is not knowing their cash flow. Most people only have a faint idea about how much are their expenses. Less than 10% of people actually record their expenses on a regular basis. Keeping close track of your income and expenses helps you in avoiding unwanted expenses and provides with the additional money for investing.
- 07.PLAN YOUR RETIREMENT EARLY?-?Most people start thinking about planning their retirement only after age 35 and majority of them keep postponing any serious action way beyond 45. Most people below the age 30 do not have a slightest idea of how much money it takes to live for 20-25 years without active income. Hence the best way is to plan your retirement as early as you can. Because an early start gives you the highest benefit of compounding.
- 08.KEEP YOUR MONEY SAFE?-?You must safe guard your hard earned money before you can actually grow it. Most people are in a hurry to generate return on investment and forget to put a fence around their money. Look at things that will take BIG money out of your pocket. Things like a major health issue, accident or theft. You need to protect yourself against such incidents. Another way is to diversify your investments into multiple assets. This will help you reduce your losses over multiple market cycles.
- 09.TREAT YOUR MONEY LIKE YOUR EMPLOYEE?-?Most people are very serious before they earn money, but lazy after they have it in their bank. The best way to treat your money is by making it work. Money doesn’t like to relax. You need to give it work, else it will slowly go away to a better master. Make sure you engage every single rupee in some kind of investment vehicle at all times. This way your money will work hard for you.
- 10.SET SOME MONEY RULES THAT WORK FOR YOU?-?The nature of money is like water. It keep flowing unless you create rules or dams to contain it. You need to set basic rules like how much of your income are you going to spend on cost of living and how much of it are you going to save. Out of the money you save, you need to set rules as to how much of your savings are for contingency, how much for long term important goals and how much for fun and enjoyment. Setting up rules will create a balance in your life.
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