When we think of New Year Resolutions, one of the most frequent areas of improvement that we look towards is money. When we think about money, all of us want to be wealthy and most of us would do anything to create that wealth. To make matters simple, follow these 7 Wealth Creation mantras as guiding principles consistently and in a disciplined manner and you are sure to come out wealthy at the other end of this journey.
1. Stop falling for get rich quick schemes
In our haste to get on the wealth train, a lot of us tend to jump on to the bandwagon of various “get rich quick” schemes. The idea of quick money has appealed to all generations. However, wealth is something that is accumulated over a longer period of time. If a financial product or scheme sounds too good to be true, know that the probability of it turning out to be a fraud is as high and the probability of hitting jackpot that much lower. Wealth is not just about the money but also the journey. As you get wealthy over time, you end up learning a lot of life and money management lessons which will elude you with any quick money.
2. Earn more than you spend
Your income is composed of two broad segments – Spends and Savings. Creating wealth is based on a primary building block of ensuring you earn more than you spend. This gap between earnings and spending can be increased in two ways – by reducing your expenses or by increasing your income. Track your expenses and credit card statements to know the main areas where you are spending unconsciously. You may come up with some spends which provide you little value, which you can happily do without. You could also look at starting a side hustle in your spare time which will then start another stream of income to add to the earnings.
3. Invest your savings
Warren Buffet is famously credited to have said – “If you don’t find a way to make money while you sleep, you will work until you die”. Keeping your savings idle in a bank account ends up eroding a lot of it’s purchasing value to the effects of inflation. Investing it in assets like debt, equity, real estate and gold helps grow that money over years to overtake the slow creep of inflation. Within these assets, today equity is one of the easiest to invest in – highly liquid, extremely low minimum amount as well as convenient. Consider starting your investing journey today with Direct Mutual Funds through Money Front.
4. Have a goal or a vision
While we all claim to want to be wealthy, in isolation that statement is as ineffective as saying I want World Peace. Wealth is a very personal concept and it means different things to different people. You should know why you want to be wealthy, how much will mean “wealthy” to you and what would you do with that wealth. In that respect, having financial goals is important. Those financial goals will help you know the meaning of wealth and using the Money Front SIP Calculator, you can easily chart out a gradual path towards it.
5. Do not take debt for things that you desire but don’t need
This is a golden rule of Wealth creation. Debt is a double edged sword. For some essential things in life like a house, buying it without a loan is next to impossible. However, once we start taking it for things that we desire without thinking whether we need it or not, we are trapping ourselves in the whirlpool of debt and repaying it at high interest rates. This is a habit which has led to the average American household accumulating $8284 in revolving Credit Card debt. Try and question yourself before big purchases and understand if it’s a desire or a need. Can you wait till the time you could accumulate the amount on your own without having to borrow?
6. Learn the basics of personal finance
Today, the financial landscape in India is complex with a number of products and categories. It is pertinent to learn the basics of Personal Finance which can then aid in navigating this route properly. Being aware of the basics will help you to make the most efficient use of the money that you earn and in good time accumulate it to wealth. Reading basic finance blogs and spending some time on research could be the starting points.
7. Invest in yourself – keep up skilling & get cosy with Tech
We live in a dynamic world where some skills are important one day and the same might become redundant some years down the line. Be curious and a continuous learner. Consistently upskilling in your chosen profession will mean that you will always be preferred over your peers who don’t do the same. Also, world will be a different place in next 10 years. And to be in touch with the new realities, it’s extremely important to be comfortable with new-age Tech. Embracing digitization and technology along with picking up new skill over years is bound to reap rich results.
It is the start of a brand New Year. If starting on the path of creating wealth is your resolution, then these 7 Mantras will stand you in good stead as your foundation on the Wealth journey.