Mr. Sashank Shah stared at the invitation which boldly proclaimed, “Saving Rs 5000 per month can make you a multimillionaire.” For a moment, he thought of this as just another gimmick to con him to invest in some money-making Ponzi scheme. Nonetheless, he decided to attend the seminar. The seminar changed his life, from what he heard and saw, he repented for being lazy with his money.
He lost plenty of opportunities that could have made him a millionaire and envy of his friends. He learned about the power of compounding. If the person begins to save early, that too with just Rs 5,000 per month for 20 years, he could accumulate Rs 1 crore!
The message is clear – if you begin to save early, it is possible to harness the power of compounding. This can result in exponential returns in your corpus. But this requires discipline to invest on a regular basis. You cannot assume that more intense savings in the later stages of life will make up for your loss.
If you are in your 30s, the following habits will help you create wealth. If you adopt smart investing habits, you could be on your way to financial freedom. Here is a small compendium of habits to make you successful as well as assist you in achieving your life goals.
Automate your Investing
Many self-made millionaires vouch when it comes to automating their finances. This simple habit helped them to achieve financial freedom earlier than anticipated. You should automate your investments by ensuring automatic SIP in different funds. It saves you time and energy. You don’t have to look at your portfolio every month. This also shields you from worrying about short-term underperformance.
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Spending is good, but earning is key
It is said that a millionaire has seven streams of income; to achieve this you must increase your income. You must strive to invest in equity funds, debt funds, and regular income funds. If you have a good job, you can invest to create passive income which can be re-invested to build a larger corpus.
Create Life Goals
Many people are ignorant about what they actually want. Life throws various choices that can be confusing, this results in haphazard decisions. It is important to identify your goals, whether small or big. When you set goals, you can plan to achieve the goal, and if you plan, you can set deadlines. It’s simple. One thing leads to another. If you want a Rolls Royce, go ahead, you must not be afraid to think big. Goals help you to have a clear vision and set up the road-map to achieve them.
Have a Plan
Do you know Bill Gates is an avid note-taker, so is Richard Branson, and every other millionaire? You are likely to achieve your goals if you maintain a to-do list. If a thought comes out of blue, note it down. It will provide you an opportunity to reflect on your goals, and also help to set a concrete road-map in action.
Invest.. Invest.. Invest
It is not your job, nor business that will make you super rich. The amount of savings and investments determines your tomorrow. On average, a millionaire invests 25% of his income each year. This helps them to create multiple streams of income over a period of time. Remember, your wealth is not measured by the amount of money you make, but by how much money you have saved and invested over the period of years.
Pay Off Your Debt
Debt is good, but only if it is a debt fund. Debt is your biggest enemy, it eats your income. As you grow older, it becomes difficult to earn money. The 30s is the golden period to make money.
If you have a mortgage, you must make it a priority to pay it before the age of 45. If you pay off your debts, you can save big money that goes to pay high interest.
If you embrace the above habits now, you are on your way to financial freedom sooner than you think.
(By Abhinav Angirish, Founder, Investonline.in)
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Source: Financial Express