How to become rich slowly but steadily!

Greetings from Vizemen!

Yes, you read that right! You will know how to become rich after you read this article and if you follow this article to the word, I can guarantee you, that you, who probably have a hard time paying your own bills can be a millionaire. The process might be a little slow, but you know what they say right? Slow and steady wins the race. So let’s get right on it, shall we?

#1 Do NOT take loans

So the first thing we want or should I say “don’t want” is debts. More specifically, loans. If you don’t have pending loans, good for you. But debts also include short-term loans or credit from the bank which banks encourage us to use. But get this, credit cards are the number one enemy for your personal finance. Do NOT use credit cards under any given circumstance. Make this your number one rule.

#2 Cut off your expenses

Use your money wisely. If you don’t take good care of your money, your money won’t take care of you when you need it the most. Cut off your useless expenses. The best way to do it is to get rid of your addictions if you have any. Also, don’t spend too much money on your apparel. I’ll tell you a secret about apparel brands. They don’t target the rich, but the poor who want to look rich. Don’t fall into the trap.

Take good care of your money

and it will do the same

#3 Invest.

This is probably the most important rule on this list! If you only knew how much power compounding holds in terms of increasing wealth, you wouldn’t come here to read this article ( Although I’m glad you did ;). If you are in your 20’s I’d highly recommend you to invest as much as you can. This is the perfect time for you to start investing because even if you suffer losses in your investing journey, you have enough time to recover from the losses before your retirement. Young people have a greater appetite to take risks which you should use to your advantage in the most optimized way.

The greatest risk of all is not taking risks at all.

The best way to invest if you are new to the investing game is mutual funds. But if you are a pro (which I assume you are not because if you were, you wouldn’t read this article), you’d rather prefer direct stocks since they offer greater returns compared to mutual funds. But greater returns means greater risks. But it’s always better to take calculated risks than simply gamble on random bluechip stocks. Start with investing in mutual funds and as you climb up the ladder of being a pro at investing you can switch to investing in stocks and gold bonds.

Mutual funds are the best way to invest if you are new to the game

#4 Stay put

Investing in mutual funds means you aren’t going to be rich in a few days, or a few months, or a few years. I’ll say it straight up, you aren’t going to be rich anytime soon! You have to have patience if you want to be rich. I stated earlier that mutual funds are preferred for beginners because they are the safest to invest in since the time horizon is very big (45 years or more if you want the best returns) and considering this big a time horizon, your money is likely not to take losses. I will explain how mutual funds work in my next article.

#5 Read books

The more you read the more you’ll go up the ladder on being a pro at investing. It’s very important to be financially educated. More specifically, read books on personal finance and investing. There are a ton of books out there, you just have to figure out which one’s for you. I’ll cover another article on why is it important to read books, so stay tuned.

Addressing the elephant in the room

How much should you invest and how often should you invest?

If you are a student I’d prefer INR 2000 on a monthly basis and if you have a job, 10% of your monthly income, again on a monthly basis. Even if you invest INR 2000 per month with an annual return of 15% over a span of 45 years, do the math!

Fine, I’ll do it for you, stop being so lazy by the way. So if you do the math you’ll get around 1.5 crores after 45 years. Even if you consider the inflation rate (which is around 5%) You’ll still get 1.3 crores in terms of today’s money value! This is the power of compounding.

I hope you learned something new today reading this article. Thank you for giving us your precious time. Stay healthy, stay safe.

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