Every rupee that passes through your hands is a seed to your financial future. Rest assured, if you are serious and responsible, financial affluence is possible, even certain. Regardless of how much you earn, your wealth can grow if you start treating money differently.
Successful people don’t build their wealth overnight. Building wealth requires long-term vision and serious willpower. The fact is that – the tools for building significant wealth – are in the hands of every individual; however one needs to follow a few strategies. While there are many ways to achieve your financial goals, we have listed a few key aspects that are important, yet easy to follow.
- Utilize Your Savings Appropriately
Construct a detailed list of your monthly expenses – rent, utility bills, insurance, groceries, car maintenance, etc. Track your income and expenses to get an accurate picture of your financial situation. Cut down unwanted expenditure – for instance, you may realize you are spending your credit card more on clothes and restaurant meals, etc. A change in this kind of habits will not only reduce your monthly financial obligations but will also help you lay the foundations to a sound financial future. Distinguish between what you really need and what you merely want. This doesn't mean you have to be miser all the time. You can definitely reward yourself, but once in a while.
- Increase Your Income Flow
Before you begin to save or invest, make sure you have a good income flow, so that a sufficient amount is left after you have covered your necessities and debts. Whatever be your current career path, find out how best you can increase your income. You can also take guidance from someone who is successful in the same field. Consider alternatives; if your career path has limited potential. Starting an additional business is one way to empower yourself. It will not only add more income to your kitty, but will also decrease your dependency on a full-time job.
- Start Investing Early Even if You Have a Small Amount
Instead of waiting to invest a sizeable amount, start early with a smaller amount. You don’t need to be a millionaire to start investing. Even smaller amounts can help you reap bigger awards in the future.
For example, you can start with a monthly RD (recurring deposit)
or SIP of just Rs 1000/-. The sooner you invest, the more interest you can accrue, and the more money you can make in the long-run.
- Diversify Your Investment Funds
‘Never put all your eggs in one basket’ – this is the basic rule for all investors.
We can’t predict what the market will do at any moment, hence make sure you have a well-diversified portfolio. Different kinds of investments pose a lower risk as compared to any individual investment within the portfolio. When one asset class is underperforming it is quite possible that another is outperforming.
- Invest for Long Term to Get the Leverage of Compounding
Stay invested for a longer-term, if you want to enjoy the benefits of compounding. The longer is your investment time frame, the more compounding works at an accelerated pace. The benefits from compounding might appear modest at the beginning; however, it accumulates strength with every passing year. Moreover, the money stays invested longer.
- Be a Disciplined Investor
Remain disciplined, if you want to find success with investing. Don't let emotions control your investment behavior. For example, as you see your investment grow over time, you will occasionally feel the temptation to remove some funds and spend it on something exciting, such as a new vehicle, new jewelry, or a fancy trip. However, if you are truly disciplined, you will fight these urges and leave your money alone until you reach your goal.
Moreover, don’t get nervous when there's a steep downward movement in the market. While a lot of people will jump off the ship when they see the markets plunging, a wise investor will stay strong and see it as an opportunity to gain more by investing more. Even world-renowned financial experts claim that a disciplined, patient investor will often be the one rewarded when markets return to their upward path.
‘Patience is a cornerstone of billionaire’ - Warren Buffett's investment strategy.
If you want to yield good returns from your investments, you need to have patience. You can’t grow a tree overnight; similarly, it takes time to grow your assets. So be patient and give your plans enough time to flourish. A dream does not become reality through magic; it takes patience, determination, and hard work.
Lastly, remember that wealth is not earned, it is created. If you want to be a successful investor, set a money mindset to fit the mold of being wealthy, and you will handle your money more wisely than you could have actually thought!