7 Surefire Ways To Create Wealth

Ways To Create Wealth

You want to create wealth but do not have a lot of money to start with. You do not earn a lot of money but you want financial independence. But you do not know where to start. You see a lot of investment advertisements but cannot make any decision of what should you do and how can you make a better investment decisions.

If earn any kind of income you can start to make investment it do not matter. All you need is a willingness to make some sacrifices in your life in the short term. Just like in fitness you have to get though some discomfort in exercising and eating right to get a better body. But you will see that even the hardest thing that can think of right now will become easy in the long run.

1. Spend less then you make

It is start of your investment journey if you spend all the money that you make then you will not have anything to invest. If you do not invest anything then you will never be able to get financial freedom.

You should try to save at least 10% of what you earn but your goals must to get this figure to 20% within some years. If you are thinking that is crazy I cannot do that then think about the person who is earring 80% of what you are earning. He is able to survive on that income then you will also be able to survive on that income.

2. Make a plan

If you do not have a plan in place you will never be able to get anything in your life done. So it apply to investment also it do not matter if the plan is big or small but you should have something in place.

What you can is simply decide where do you want to go in your life. If you want to accumulate $1 million dollars in your life time. It is simple and early understandable goal. If in any point in your life you reach this goal then you have achieved this goal. Without goals you cannot make a plan.

3. Educate yourself

People spend so much time learning about making money but they spend a lot less in learning about investing what they have earned. You can only do anything better if you spend time learning about it.

4. Systematic investment

You can systematic investment plans to invest a small sum of money on monthly basis you can start with a very small amount of money.

There are lot it in the world where you can start with a small amount and keep investing on the monthly basis for a long time. But you have to understand one thing that you are investing in this kind of schemes for long run 10 to 20 years so do not worry about small ups and downs in your portfolio. You should never invest more then 20% percent of your total portfolio in stock market.

5. Create a reserve

Every one should have at lest 6 month of expense in cash in a different bank account for emergency. You cannot plan for everything in your life so it is good idea to have some money stashed in undisclosed location ( just kidding) for that those needs.

Because if you do not this kind of reserve you will take make this payments by credit card or borrow money where you need to pay interest. So you will lack behind in the long on your wealth building process.

6. Bad spending habits in investment success

If you have some bad spending habits and you find yourself at end or middle of the month that you do not have any money then have other thing coming. Then I have a special technique for you what you can do is step up a system in which when you will receive your salary 10 or 20 % of it directly go in some kind of investment. Like payment of home loan or a sip mutual fund things like that so that you do not have any control over that income.

Then you will only be able to spend the money that is left and in the process you will be able to make an assets as well.

7. Make a budget

Making a budget will make a lot of sense after you done all the above things. What I mean by budget is simple you determine what amount of money you are going to spend on different aspect of your life like grocery, eating out, bills, rent or mortgage, entertainment etc.

Then what you will do is simple at the end of each month you will measure how you have done in all those areas have you spend less or more. If you think that you spend even less then you should find ways to do it.

8. Spend time

You need to spend time on your finance you need to learn about where to invest and how to invest you cannot expect that you will get better at things magically you have spend time. The difference between rich and poor is simple rich spend time on thinking about where they will invest and poor think about where they are going to spend there earnings.

9. Learn about compound interest

Compound interest is the most powerful thing in this if you put it in practice. Even a small contributions towards your assets will become quite a big return if you follow this principle. If you invest $50 monthly in something that give you 10% yearly return then reinvest all your earning for 45 year you will have $75000 by the end of it.

So even a $50 investment a month can make such a difference in long run.

10. Start to think about financial independence

If you are not thinking about financial independence there is a chance that you will never get it. So start making plan today. You don’t need to start big but the important thing is that you start.

So now you know how you can create your person wealth. But you have to understand one thing that creating wealth is a long process it will take at least 20 years or sometime even more. But you will see that in some years most of the points that I have made will become second nature to you and till not feel like a work anymore. So best of luck if you any questions then ask.

Published by Piyush Tada

Piyush Tada is a Finance Graduate with a interest in personality development. Like to read , watch movies and share what he learn.