Beginners Guide to Wealth Creation – Four Proven Tips
July 15, 2019
It is the innate desire of all to build a pool of wealth to support life after retirement. However, to be able to live that life, you need to have a substantial wealth creation plan in place. This write up enlists a few tried and tested wealth creation tips for the beginners.
You may have read several articles online and may have even heard financial experts talk about wealth creation plans. Remember, the old story, we all studied in school about the thirsty crow? The wise bird instantly recognised that dropping the pebbles one by one into the pot can bring the water level up and it can quench its thirst. With the right plan, what seemed impossible became a reality soon. We, too, can achieve our financial goals of creating a wealth pool by investing regularly, and meticulously planning the savings, expenditure and the debts. Here a few proven guide to wealth creation for beginners to help them accomplish your financial goals:
It is a popular belief among many that you need money to make money; however, contrary to this belief, wealth creation from scratch is achievable. Remember the phrase, ‘Early bird gets the worm,’ the same principle applies to wealth creation. The answer to how to create wealth lies in starting early. When you start saving from a young age, you give yourself a better chance for the savings to grow. Focus on saving as much as you can by reducing the expenses. This would help you build a significant pool of wealth in the long run. Also, at the same time, you can look for additional streams of income.
Time and Knowledge are Crucial
A study suggests that nearly 60% of the middle-class Indian adults have no idea about wealth creation strategies. They don’t even understand the basic concepts of finance, which eventually leads to poor investment decision making. Exposure to concepts of budgeting, investing, savings at an early age can help the youngsters to make informed financial decisions for a more secure future. Taking the right investment decision right at the start will give you more time to help the capital grow. Taking a few hours every week to read and acquire knowledge about financial planning will help you manage your finances more effectively, which in turn will go a long way in wealth building.
Take Advantage of your workplace
If you are paying for the Employee Provident Fund (EPF), good. But, if your organisation offers, National Pension System (NPS), subscribe for it. Beginners may think that these schemes affect their immediate liquidity, but think long-term; it would secure your retirement.
Go the Equity Route
This is one of the most effective strategies for wealth creation. You can invest in equity through the mutual fund schemes or you can directly invest in shares to enjoy the benefit of compounding. Investing in equity funds for short term gains can be volatile, but it is best suited for long-term wealth creation goals.
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