How To Become Rich???? Part-2

Continued from Part 1

4. Have an emergency fund

You must save at least your 6 months expense equivalent in an emergency fund which you can liquidate in 48-72 hours. I would advise opt for some good rated liquid mutual fund for this. Also you can consider short term bank FDs. Please never invest this money in stock, mutual fund and in any real estate .Because all these are risky .Increase this fund by the percentage equivalent to every year. To create this fund set a rule in your salary account to deduct 5k from your account to a recurring FD or to a liquid mutual fund every month.

Ex:Suppose your monthly expense is 30k .Then you saved in emergency fund 30*6=180k.Next year suppose you will have a kid and expense increase to 40k.Then this fund should be increased to 40*6=240k

5. Control your expenses .try to live a lean life as much as possible. Control your instant gratification and avoid loans

Hence please cut your expense as much as possible. Remember one day you will grow old and cannot work .In those days these savings will help you survive in a great way gloriously and respectfully. Ex: Where you can take a public transport avoid hiring cab or auto. Where you can walk avoid any transport.

The amount of money saved is the amount of money earned.

Follow these things strictly without shame or blame. Don’t listen to any of your spendthrift friend.I saw my friends who did not follow this are now in the spiderweb of loans.

See try to avoid loans as much as possible though sometimes we cannot avoid. Like in case of house ,study etc. My point is to make your saving enough to take small loan. Always prohibit yourself from credit card loan and personal loan.

Control your desire to fulfill instance gratification. I saw people recently bought a lot of things from flip kart and Amazon just because it was on a discount sale though they do not require those. I saw my friends using 3 mobile phones. Even worlds greatest investor and businessman Warren buffet don’t use one J

Use season end discount sales as an opportunity to save and shop if it is needed.

6. Increase the ability to earn

It can be done in 3 ways:

• Invest on your health and family
• Invest to learn new skill
• Invest to make an earning from your passion

• Invest in your health and family:

Please make it a practice daily minimum one hour for physical exercise such as walking/running/cycling/yoga/pranayam etc. It will increase your work ability and immune power. In turn a healthy body, mind and soul. This will definitely enhance your skills in professional field .Isn’t it!

Always have healthy and nutritious food and avoid junk food

This will definitely make you stay away from doctor ,In long run healthy life and money saving technique! Hope you will agree J

Invest quality time with family. It is the family which will be your first support in your bad time. So do not ignore this.

•  Invest to learn new skill

Learn new skills to increase your bargain power at job. Never hesitate to go out of your comfort zone.

Ex: Let me tell you from IT field .Suppose a guy is working in Java technology. In market recently Big data has come .So he can learn something related to java in big data i.e. Hadoop. And can bargain with current employer .Else can switch to a new job. In this way he can increase his salary. Definitely this may cost him sometimes.

But I do feel the best investment is investment on yourself .Do you disagree!

• Invest to make an earning from your passion

You can convert your passion to convert in your alternative earning source. Suppose you are good at convincing people , then you can opt for insurance agent ship which can earn you passive income.

Suppose you are passionate to help people in financial matters, then you can do so in and can charge nominally in return of your service.

Suppose you like to prepare cake , then you can prepare and serve at parties .

If you like to teach then try for tutoring students.

Sometimes for this you need to invest money and many times time. 

So be prepared for this. Also if you are doing this along with your day job, then you need to burn your weekends.

It is always advisable to have an alternate income flow. Because in case you lost your job you can convert your passion as an income source for some time.

And what ever you will do , don't forget ethics.

My point is “you need to have an life boat (passionate job) side to your ship (main job).In case your ship sinks (lost job), you can jump to life boat and can survive for some time. And who knows you can become an entrepreneur by using this life boat one day!”

How To Become Rich ??? Part-3