Contrary to popular belief, one does not have
to earn a lot of money to become wealthy. Here are some simple Mantras
to secure your financial freedom!
Dont procrastinate
on wealth creation - Many people
procratinate on saving money. They always wait for the next year, next
increment, next bonus to start savings and then the cycle repeats
again. You do not need to start investing large amounts, start small.
Even a years delay makes a huge difference as wealth compounds with
time.
Prepone Investments, Postpone expenses
- Set targets on how much you want
to invest and invest it as soon as you get the money. Do not spend
first and save (whatever is left) later.
You do not need crores - It’s a myth that you need lots of money to
start investing. Even small amounts over time become large due to the
magic of compounding.
Go for the long term - Especially in Equity it is important to invest
for the long term. They give the best returns in the long term. For
short term look at debt.
Invest Regularly - This is very important. You can invest in
SIP’s which average out your risk. For eg. investing 10,000 rupees a
month would yield 1 crore in 15 years at a annual rate of
20%.
Don’t link your lifestyle to stock market
- When the stock market is rising,
our notional wealth increases. Soon we start believing that growth of
our wealth is real and long term. This false state of suddenly feeling
wealthy leads to change in lifestyle. One of the perils of increasing
expenses on your lifestyle during stock market boom is that we get
used to comforts and luxuries in life. When economic situation turns
bad we will then struggle to curtail our expenses. In fact in reality
while markets are rising, we should control our expenses and let our
wealth grow. On the other hand when equity markets are down, our
wealth is not growing in real terms. Things are also cheaper generally
during such periods.
Ignore Rumours - If you are confident about the company you
have invested in, leave it. Ignore rumours.
Research & Learn - Learn about budgeting, credit, and debt. Learn
how credit cards work! If you get into debt early it can sabotage your
progress. Whenever you buy a stock or fund, don’t do it on a tip or
whim, but do solid research to back up your buy. Investing can be very
interesting and rewarding!