How to create Wealth? be it for Retirement, or Buying a Asset or to fulfill any Goals like Children Education, Marriage Et all. Though there are lot of laws / ideas , i would like to point few important ones.
- Try to save certain percentage of your regular income, start with 10% and slowly increase the saving percentage. I have put a bare minimum allocation because; initially it won’t be easy to allocate more so start with 5 or 10% of your income and increase it. If you could allocate more from the starting stage it-self, that’s really a great start.
- Once you are comfortable with the 1st law, then start putting the savings to work for you. Invest it in some good Diversified Mutual Funds, so that it gives you reasonable returns. Keep the savings part in a Bank FD or Liquid Schemes and invest certain part of savings in Mutual Funds. While the savings part will help you to meet your exigency expenses, the investment part will take care of your long term goals. Please choose the Investment schemes in line with your Risk Profile and Time Horizon. Seek a professional help in case you need any.
- The third law is very important to create a corpus, except for buying a House for your own use do not get into debt for buying any other stuff. Buying things in EMI is the most abused product in our life. It’s easy to buy stuffs thro EMI, but paying the same is very difficult.
- Once you have certain amount of savings in your kitty and have started to invest, your mind will wander for products which can give you quick returns. There are lot of get rich quick schemes in the market, though they promise high & quick returns, what they don’t tell you upfront are the Risk part of that product. Avoid Get-Rich-Quick Scheme.
- Best Investment one can make is on himself, this is told by Billionaire investor Warren Buffett in a interview to Forbes best investment you can make is one that “you can‘t beat,” can‘t be taxed and not even inflation can take away from you. “Ultimately, there’s one investment that supersedes all others: Invest in yourself,” This will help you to increase your earning power.
- Diversify your investments among various asset class like- Equity, Debt, Gold and also among these asset class diversify. In equity have some Multicap Funds and mid or small cap funds. Under Debt have Debt funds, fixed deposits from Banks or some good NBFCs.
If you follow these rules diligently, you are on a right track to create the required wealth for you. Will, surely write more on the above laws separately in my subsequent post.
Happy Investing
RaVi
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