Simple rules to become wealthy
Thursday, October 22, 2009
Labels:
Money
0
comments
Your wealth is not estimated based on the kind of lifestyle you follow. Your wealth is derived from your assets. Mr. Jim, who lives next door may have got a well furnished house, drive a posh car and go on partying everyday. Can we decide that he is wealthy enough? No, he may not be.
Your house or the kind of car you have doesn't determine your wealth. What if he spends everything he earns? Takes debts extensively, thinking that he can afford it? A posh lifestyle need not necessarily showcase the wealth of someone.
A wealthy person may chose to live a posh life or in the other hand, a billionaire like Warren Buffet can chose to live frugally. Everything depends upon one's perspective towards life and money. Nevertheless, one common characteristic of wealthy people is, they do live well below their means. Even if they chose to live a posh lifestyle.
So, what does this indicate to a common man? The first and foremost thing, how much ever you earn, your lifestyle should not engage you in spending more than what you earn. Avoiding unnecessary expenditures and living well below your means do not increase your wealth. Well, it is the starting point and the important means to become wealthy. As I said already, it is all about your mind set and perspective.
Lets assume that you have decided to become wealthy. Whats next?
1) Live frugally. Learn to live well below your means. I don't mean you to lead a cheap life, there is a big difference. Be fair to give your share of the dinner check or your share for your friend's marriage gift. Be conscious about money and what do you spend for. When you are 65, most probably you will look back and say, "I should have invested another 20 grands in XYZ mutual fund." rather than, "I should have leased that BMW."
2) Be an early investor. It doesn't matter how old you are now, start your investments. At the least, try to invest 15% of your monthly income. It's your hard earned money, think and analyze before investing in any instrument.
3) Invest in your own financial literacy. Financial awareness and knowledge is a must if you want to be a successful investor. It doesn't mean that you should complete your degree in finance. Rather, you should be able to read financial statements and count numbers.
4) Train your brain to see what your mind cannot see. Most of the times, because of financial illiteracy we depend on someone else's opinion and we are forced to see 95% of the information with our eyes and the rest 5% through our brain. It should be the other way around.
5) Always look out for various opportunities to earn money. If you are an employee of a company, it doesn't means that your job should be your only source of income. In this information era, the virtual internet space provides you with a lot of opportunities to earn money. Make use of it.
6) Never ever end up paying interest for your credit card debt. Now-a-days, everyone out there is looking forward to improve their wealth at your cost. Getting a credit card is much easier than getting a meal. Don't get fooled. Plan for your emergencies, build an emergency fund. Don't get trapped in the credit card debt pit.
These are some basic rules which followed might give you a very high yield in a long run.
Your house or the kind of car you have doesn't determine your wealth. What if he spends everything he earns? Takes debts extensively, thinking that he can afford it? A posh lifestyle need not necessarily showcase the wealth of someone.
A wealthy person may chose to live a posh life or in the other hand, a billionaire like Warren Buffet can chose to live frugally. Everything depends upon one's perspective towards life and money. Nevertheless, one common characteristic of wealthy people is, they do live well below their means. Even if they chose to live a posh lifestyle.
So, what does this indicate to a common man? The first and foremost thing, how much ever you earn, your lifestyle should not engage you in spending more than what you earn. Avoiding unnecessary expenditures and living well below your means do not increase your wealth. Well, it is the starting point and the important means to become wealthy. As I said already, it is all about your mind set and perspective.
Lets assume that you have decided to become wealthy. Whats next?
1) Live frugally. Learn to live well below your means. I don't mean you to lead a cheap life, there is a big difference. Be fair to give your share of the dinner check or your share for your friend's marriage gift. Be conscious about money and what do you spend for. When you are 65, most probably you will look back and say, "I should have invested another 20 grands in XYZ mutual fund." rather than, "I should have leased that BMW."
2) Be an early investor. It doesn't matter how old you are now, start your investments. At the least, try to invest 15% of your monthly income. It's your hard earned money, think and analyze before investing in any instrument.
3) Invest in your own financial literacy. Financial awareness and knowledge is a must if you want to be a successful investor. It doesn't mean that you should complete your degree in finance. Rather, you should be able to read financial statements and count numbers.
4) Train your brain to see what your mind cannot see. Most of the times, because of financial illiteracy we depend on someone else's opinion and we are forced to see 95% of the information with our eyes and the rest 5% through our brain. It should be the other way around.
5) Always look out for various opportunities to earn money. If you are an employee of a company, it doesn't means that your job should be your only source of income. In this information era, the virtual internet space provides you with a lot of opportunities to earn money. Make use of it.
6) Never ever end up paying interest for your credit card debt. Now-a-days, everyone out there is looking forward to improve their wealth at your cost. Getting a credit card is much easier than getting a meal. Don't get fooled. Plan for your emergencies, build an emergency fund. Don't get trapped in the credit card debt pit.
These are some basic rules which followed might give you a very high yield in a long run.
0 comments: to “ Simple rules to become wealthy ” so far...
Post a Comment