Becoming a rich person is not difficult as you think. If you follow financial discipline.
If you make a habit of saving and invest what you saved half work done. Other half is patience.
- Do not buy unnecessary things.
- If you want to buy something which is not much needed wait for the best deals.
- Live below your means.
- Avoid credit card trap or debt trap, use how much you can repay.
- Lease is better than rent.
- Avoid luxury stuff.
Earn more money
- Do not depend on single source of income.
- Invest money instead of leaving it in saving account.
- Money without invested will loose it’s value over inflation.
- Rich persons have 7 streams of income in an average.
- Read business magazines and journals you will get some idea about investment.
7 Streams of incomes
- Earned income.
- Income from real estate.
- Capital appreciation.
- Interest income.
- Royalty income.
- Income from investments.
- Income from rent.
Power of compounding
Power of compounding is very dominant part of getting rich. Its definition will vary with respect to the type of investment. In simple words power of compounding means exponential growth of your investment.
Consider power of compounding with respect to fixed deposit (FD), compounding or compound interest will pay not only interest on your principal amount, it will pay interest for your principal amount along with the interest for previous terms interest.
Similarly consider power of compounding with respect to share market, John invested 1000 bucks in the equity shares of a company XYZ with price 100 bucks each, he is having 10 equity shares of company XYZ. Company give bonus shares 1:1, now he has 20 shares, for certain period share price will fall. In long term it will regain its value. He will get dividends for 20 shares this process will repeat. In long run he will have more number of shares.
Invest in yourself
The best investment in the world is you, invest in yourself means upgrade your skill sets it will fetch more and more money. World is updating each and every day be sync with the world.