5 Simple Steps for Wealth Creation

The problem with simple steps is most people do not believe it.

Someone asked me suggest 3 shares which will make me good gains over the next 10-15 years.

I said, if you are not planning to actively manage, it makes sense to invest in 3 mutual fund schemes.

He said; no no, i want good stocks.

I said, I can tell you 4-5 shares in my portfolio take your pick. HOWEVER i review it on a Quarterly basis, may buy, sell, trade,…so you run the risk of not keeping in touch with me & showed him the list containing Hdfc, Hdfc bank, Coromandel, Tata Motors, Infosys,  L&T.

He said….. these everybody knows!!

5 Simple Steps

  1. Spend less than you earn: On a month to month basis you may be living within your means, but look at those times when you are worried about who will pay your credit card bill. ALSO putting away money for ALL your future goals like marriage, children, children’s goals, retirement….is what one means by saying ‘spend’, not just daal chawal.
  2. Borrowing is avoidable: If you have money use it. I found a man earning Rs. 5 lakh a month being encouraged to take a Rs. 12L loan to buy a car. I said wait for 3-4 months, surrender one stupid ULIP and the car will be yours. Attitude towards debt HAS to be ‘Shit, I hate you, and will touch you ONLY IF I HAVE TO.
  3. Cars and Airconditioners have a greater running cost per year on fuel MUCH more than the EMI. See if you can afford that.
  4. Save, Invest and take a term insurance: Medical insurance is not much of an option if you are over 35 years. Till then if you depend on company medical cover, it is not so scary, but as a rule, if there is a risk it should be covered. Simple Risk Rules.
  5. Take care of your health: I know a 87 year old man spending Rs. 1000 a YEAR on medicines, and one 55 year old spending Rs. 3800 p.m (and to be spent for the rest of her life). Do you need a PhD in maths to know who will have more money in the bank, assuming the corpus is not very different?

Seriously, there are zillions of such things – and you also know most of them, the question is do you do it?

Life is about doing, not just knowing.

Do you Really want to get Rich / Wealthy?

Ask Yourself – “Do you Really want to get rich / wealthy”?

Is it on your priority list OR are you happy going through life living salary to salary and retiring at 58 and then wondering how to spend the next 20/30/40 years of your life?

Not many people are cut out to create wealth. In fact most people do not.

How much time do you spend each day thinking about it?

What?

You don’t even think about financial independence once a day and you expect to get there in your 40s?

Forget about it.

You think you CANNOT resist spending Rs. 200,000 on that bike that you are dreaming off or on a car costing Rs. 12,00,000 when you have not thought about Investing for Financial Independence?

Forget financial independence in your 40s, after all you do not want it as badly as you want your car or house, do you?

Likewise, what are you willing to sacrifice to build your Retirement corpus? It takes some sacrifice, and the longer you delay that sacrifice, the larger the sacrifice becomes.

If you are 33 yrs, and not yet set up any SIP for retirement, and all your money is in Bank FD, Real Estate, ULIPS, LIC etc, kiss your early retirement / wealth creation dreams a Happy Goodbye.

Cost of Delay:-

The longer you delay the lesser the chances of you being able to create any wealth.

The longer you delay, the lesser retirement corpus.

The longer you delay, the longer you have to work.

The longer you delay, higher chance of you working forcefully even if your health doesn’t support.

The longer you delay, the sooner your happy retirement dreams will fade away.

#theequitylearners

#artharthifinancialservices

P.S- Interested people can contact us for Financial Independence Program.

Why Review?

Don’t be a blind follower of your fund despite signs of trouble.

Staying invested in mutual funds over the long term is not enough.

REVIEW your portfolio PERIODICALLY to ensure you are investing in the right instruments.

Kaustubh Deole

Tips for Wealth Creation

Investors should use:

Banks for short term cash management.

Insurance to cover the risks.

Gold to hedge the currency (i.e. Rupee).

Real Estate for consumption (Residence) or regular income (rent).

Capital Market to create long term wealth.

Unfortunately, it happens otherwise.
People tend to use:

Banks & Insurance for investments,

Gold (jewellery) for consumption ,

Real Estate for long term wealth creation, &

Capital Market for speculation and short term gain.

Needless to say, why they fail to create wealth!

Quiz

Rs 100 is kept by your great greater and greatest grand father in the year 1818 in a secret box – Hint to open the box is written in encoded format on the box

Money in this box is growing at a rate of 10% per annum compounded annually

In the year 1918, your great grand father found the box and tried to open, but he was unable to decipher the code. Box went into hidden secret place after that… And still money is growing at 10% p. a

In the year 2016, when you went to your hometown, you heard from some of your neighbours about the secret box and you wanted to explore.. So you took the help of nearby archaeologists and excavated some places in near by village where ur great grand father used to live and finally you found the box

You took it home started trying to decipher the code.. You logged in the decipher code on super computer and it took 2 years and finally super computer revealed the secret code.

You arranged the numbers on the box as per the code revealed by super computer and the box finally opened

Can you tell the amount of money you see TODAY in 2018 year?

Also, tell me what would be the value of money ur great grand father would have seen if he opened the box in 1918 year?

Kaustubh Deole