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Get This Right to Be Wealthier

END OF ANOTHER FINANCIAL YEAR:


A New Financial Year is here and making new Financial Year Resolutions could be useful for the future. Many people around you would teach how to make money but very rarely would someone advise you on how to spend/invest it.


It doesn't matter how much money you make, at the end of the month, what matters is how much you spend or invest. For example, if someone earns 70,000 a month and spends all of it, they'll just be broke. But if you earn 50,000 and save 10,000 every month, 10 years down the line you'll still be wealthier than the person who earns 70k a month, 


There are few habits that you can correct straight away and start your journey to a wealthier future. 


1. BASIC NEEDS: First things first, you have to learn to differentiate between needs and wants. Your house, food, medicines are your needs. You can't compromise much on these needs but its important to stay away from spending on things that don't make you wealthy. 


Lets say you need a Car for your commute to work and decide to get a car on Loan. You put down Rs. 3 lakh from your savings and Loan Rs. 5 lakh @ 8% p.a for 10 years for an EMI of 10k/month. At the end of 5 years, you'll be left with a car that has depreciated more than 50% of what you've paid and you'll go out and buy another which is more expensive because probably 5 years down the line you'll be earning more. 


On the flip side, if you think about owning a car as a need you could very well get a used Car for 3 lakh that you had saved already and invest Rs. 10,000/month for 5 year in an asset that apprecites 10% p.a at the end of 5 Years, at the end of 5 years you would have around 8 lakh as your own wealth.


2. SAVINGS:  A very big misconception about saving money is stashing it in savings accounts. Savings accounts don't even cover for inflation these days. Save money just for emergency situations. For medical emergencies, for repairing and maintenance of your assets etc. 


3. INVESTMENTS: Investments are things that will make you money for owning them. Investing in stocks and Real Estate are 2 traditional ways of investment. Both can create income for you over a long run and usually appreciate exponentially over a long run. 


4. PROTECT: A very important line of action in wealth creation is to protect your money and assets that you create over a period of time. A car insurance to protect your car, A health insurance to provide for your medical emergencies. A Life Insurance to protect the ones who are dependent on you in case of the inevitable scenario. If you're still 30-40 years old a life insurance worth 1 crore wouldn't cost you more than what you spend in one outing for Drinks and Dinner with your friends. 


5. INVEST IN YOURSELF AND YOUR FAMILY: The most ignored but also the most crucial investment one needs to make. Invest in yourself as much as you can. Invest in your physical health & your mental health. Stay active, take care of your body and your mind. Its important to be happy because any other state of mind can surely result in destruction of the wealth that you're trying to create. Enjoy it with your family and loved ones. 


WISHING YOU A VERY HAPPY AND PROSPEROUS FINANCIAL YEAR. ✌️


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