Rich or Wealthy – are they the same? Robert Kiyosaki, author of the book “Rich Dad, Poor Dad” thinks otherwise. He says the rich have lots of money, but the wealthy don’t worry about money.
While the former makes money, they are not financially free till they get prudent with their finances (managing expenses andthat is). A wealthy person in turn has provided for his by saving enough to sustain a lifestyle or by building adequate passive income sources.
Some simple strategies can make you wealthy as well:
Set a purpose
Money is a shallow motivator. Money at best is an external goal for a financial plan that lets you buy a house, car, gadgets and so on. Ideally, you should work for a larger purpose – say to become financially free or retire early to pursue your long-cherished passion.
So, set an internally driven goal that is self-propelling and that motivates you to save more.
Get started NOW
In a crowded department store, when there are multiple queues, you start somewhere. Isn’t it? If you are lucky, you jump to new queues and ultimately get to a counter. If you never got into the line, you never get to the front. Similarly, you need to start saving today without worrying about how you can retire or build a decentnest.
While the target might look intimidating initially, start taking action now. If you can save only a few thousands, start with it and scale up later. The pursuit of perfection can freeze you. Instead, keep moving forward …and just do it.
There are two ways to improve your flows – either by increasing your income or by reducing your expenditure. If you are not earning enough, work towards improving your income by doing a side hustle or shifting to a better-paying job. Also, cut back where you can, which will allow you to save more.
Building wealth is all about prudent management of risk and return. Become too conservative and you end up eroding your wealth. In the past, annual inflation has been in the 6-7 per cent range. So, if yourdoesn’t earn that much, your wealth will be eroded.
Therefore, seek a decent exposure to equity which will in turn help you earn more than inflation annually. Youris a function of your age, understanding of risk, horizon, and financial target. By hiring a , you get to identify the ideal asset mix for your .
Not least, manage the downside by havingand insurance in place.
You might have the best plan and strategies in place. But if you are not disciplined, you might not get there. Automate yourprocess, so that there are no second thoughts. ) is the best mode of for retail investors. This should be ideally the first thing to go off your monthly income.
Saving is a collective effort. Get the family on board and give them the ‘big picture’ so that they know what a delayed gratification could mean to their future.
Don’t be averse to seeking professional financial help. If you are not familiar with your finances, hire a. While they will charge you for their services, in the long run you will still be financially better off. Typically, financial help you identify your financial goals, make an plan and also reduce tax liabilities in the process.
Look for a certifiedprofessional with good credentials and a solid track record.
Wealth is also a form of delayed gratification where you make a choice between consumption today and wealth tomorrow. Being wealthy is all about setting a ‘real’ purpose, becoming disciplined and just doing it.