March 13 , 2013
The old saying goes, to make a huge fortune you need to start with a small fortune. Though it's true that to make money one needs to start with some money you don't need a fortune to begin with. It takes the right attitude and a few financially healthy habits to amass wealth. Against popular belief it doesn't take a financial pro to get finances right, any regular person with the will can achieve it.
One of the most important traits you need to develop is the ability of thinking differently and not letting your decisions be overclouded by the opinions and actions of others. Let your decisions be based on true information and facts correctly interpreted.
Here are some habits you can't avoid to get wealthy:
1. Reinvest profits
At every instance you can, plough back your savings and profits from earlier investments into further investments. Get over the temptation to spend all the extra money you have. Even small amounts can make huge difference due to the effect of compounding. The earlier you start the better. The power of compounding cannot be understated!
2. Watch expenses
Investing is smart but spending scrupulously is smarter. Often it is the expenses that we don't consider heavy that drain pockets. For many young people having lunch outside frequently, commuting by cab/rickshaw are the culprits. Avoid frequent and expensive partying. You don't have to live a monk's life but you can certainly avoid extravaganzas. While shopping for clothes, bags, shoes have a budget in mind.
Truly rich people are vigilant about the tiniest of expenses. Keep a watchful eye over each and every expense and eventually you'll have more money to keep.
3. Limit borrowings
Living on loans and a credit card lifestyle can pull you off the track to becoming wealthy. As much as you can, avoid living on borrowed money. Plan your expenses and save enough to meet them. Most expenses that people say are a necessity can be delayed. Like if you want to purchase an LCD TV or a bike, save for some months or a year and purchase instead of paying EMIs.
If you must borrow, negotiate with the lender to offer a rate that you can pay. When the debts are off you, invest your money right.
Many of the richest people in the world never had great college degrees, some didn't even complete basic education but they all had one thing in common – persistence and an insatiable desire to make it big. Persistence is a key that can unlock difficult doors. This doesn't imply you can have any goals and pursue them but rather take calculated steps with measurable risks. Being persistent doesn't mean you go on chasing investments you've made that have turned unproductive; you also need to know when to make the exit.
When you have made investments stay tuned to the pulse of the industry. Read finance blogs. Many of them provide useful advice worth reading.
Finally success means different things to different people. Money accumulated isn't the ultimate yardstick of success. There are plenty of astoundingly rich people who live a miserable life. Do things that make you happy and let you make others happy.