Before
starting ,people have lot of question? My earning is so less. How can I start ?
Dear friends
money attracts money… this is law of nature.
And to make
money we need to start from somewhere, the best time is now ….
7. Invest your saving to increase earning:
Never keep money staying in your
savings account idle.
Break the
barrier of fixed things from your brain. Let me give you a good example: Your banks
FD mostly give you 8% interest. After taxation this will reduce to 6% or 7%.The
market inflation is more than 10%.So just think how you lost the purchasing
power of your money in FD! Forget about becoming rich!
I am not
against FD and other fixed income. However sometimes not to take risk is a big
risk.
To be on
safer side use thumb rule of 100-x where x is your age. Suppose you are 28 year
old, then you must save 100-28=72% in equity or mutual fund and rest in fixed
income such as PPF, EPF, and Bank FD etc.
You must buy Quality stocks and mutual funds while you are planning for
something 10/15 years horizon. Suppose you bought a quality stock, over a
period of time it will pay you dividend and stock price appreciation. ex: Somebody
bought Rs10, 000/- stocks of page industry in the year 2007.Now after 7 year
that is giving back a value of more than Rs3, 69,000/-.Apart from this he is
getting dividends. Infarct that guy recovered all the principal money from
dividends. Same with mutual funds. I would suggest if you don’t know about
stocks don’t worry, start investing in good rated mutual funds. And never
invest in ULIPS.
Never
invest in stocks or mutual funds the money which you need in next 3-5 years. Stocks
and mutual funds can be used for long term goals (10-15 years planning) like children
marriage, child higher education and retirement planning etc. Statistics says this will multiply
over long time horizon beating inflation and giving good return.To become rich you need to beat inflation.
As
far as gold concerned it should not exceed more than 5% of your CTC. It would
be good if you invest through ETF. However in my portfolio gold percentage is
0.
If you are taking loan, then use this
for generating assets and not liabilities.
ex: Good to
save money and buy car not through car loan.
For
real estate at a time very huge amount is required because in India this is
actually not real, transparent and highly inflated! You can definitely plan for
this but not invest all your money here. Suppose you built a house a put that
house on rent, then you started earning rental income which will increase year
on year basis.
Please never be greedy to invest in chit funds
and other attractive plans which are not regulated by SEBI , RBI or by Minister
of finance. These all are punzi schemes. At the end you will get nothing. Ex:
Recent Chit fund scam in Orissa and west Bengal.
My point is “Rich buys assets to increase cash flow where as middle class and poor
buys liabilities in turn to become more poor or to stay in same condition for
years (most of times lifetime).
8.
If you desire to help your friend, do so in a way that it will not bring your
friend's burdens upon yourself.
This is in
fact very sensitive and debatable topic. You may become bankrupt by helping your
friend or relative who has habit of asking for money instead doing something to
improve their financial condition.
However I just
want to tell you 2 things on which you can help:
- The person’s current and future, debt and earning capacity
- His ethicalness and past record.
Just want to
extract the story from “the richest man in Babylon” by George S. Clason.
“There
are an Ox and Ass who are friends. One evening ox bemoaning to the ass the
Hardness of his
lot: 'I do labor pulling the plow from morning until night. No matter how hot
the day, or how tired my legs, or how the bow doth chafe my neck, still must I
work. But you are a creature of leisure. You are trapped with a colorful
blanket and do nothing more than carry our master about where
he wishes to
go. When he goes nowhere you do rest and eat the green grass all the day.'
"Now the
ass, in spite of his vicious heels, was a goodly fellow and sympathized with
the ox.
'My good
friend, he replied, 'you do work very hard and I would help ease your lot.
Therefore, will I tell you how you may have a day of rest. In the morning when
the slave comes to fetch you to the plow, lie upon the ground and bellow much
that he may say you are sick and cannot work.'
"So the ox
took the advice of the ass and the next morning the slave returned to the
farmer and told him the ox
was sick and could not pull the plow.
" 'Then,'
said the farmer, "hitch the ass to the plow for the plowing must go on.'
"All that
day the ass, who had only intended to help his friend, found himself compelled
to do the ox's task.
When night came and he was released from the plow his heart was bitter and his
legs were weary and his neck was sore where the bow had chafed it.
"The ox
began first. 'You are my good friend. Because of your wise advice I have
enjoyed a day of
rest.'" 'And I,' retorted the ass, 'am like many another simple hearted one
who starts to help a friend and ends up by doing his task for him. Hereafter
you draw your own plow, for I did hear the master tell the slave to send for
the butcher were you sick again. I wish he would, for you are a lazy fellow.'
Thereafter
they spoke to each other no more— this ended their friendship. “
Guys what do you think??? Go ahead and become rich ……So When are going to become rich???
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