The Top Secrets Wealthy People Wouldn't Share With You
If you want to become wealthy in life, then you have to study and work like a prosperous people. Due to advancement in technology, many pieces of information are readily available on the internet. But despite all these majorities of people are still struggling in their life. There is a massive difference between a wealthy and a rich individual.
So, what are those secrets and despite that’s available in the public domain, we are still unable to use them. In this article, I want to share a few secrets which wealthy individual use for creating their massive wealth. So, let’s begin.
Inflation Steals Your Wealth
Have you heard about the term inflation? Well, this is the biggest enemy which will eat away your money in future. In simple words, it means a general increase in prices of goods as well as services, and because of this purchasing value of money will reduce.
What you could have purchased ten years back with Rs. 1000, now you are not in the same position anymore. There are a few reasons why inflation happens, but the most common cause is an increase in the production cost, i.e. because of this the cost of goods and services automatically goes high. Then when there is a surge in demand but supply is less. So, consumers are willing to pay a high price. And there are many factors which are interrelated to each other.
These wealthy people know and understand this concept very well. And that’s why they create multiple sources of income. If you have understood this concept, then I request you to study further as to how you can overcome this inflation in future. Having multiple sources of income is one way to save yourself.
Buy Assets, Not Liabilities
In the previous sub-topic, we have talked about inflation. Now, let’s understand how we can overcome this situation. If you want to save yourself from this situation in future, then start investing as much as possible.
Remember to invest in assets, not on the liabilities. Invest in stock, bonds, real estate, land, and gold etc. In simple words, you need to have multiple sources of income in future.
Since wealthy people make lots of intelligent investment, they don’t have to worry about inflation. But remember, first you have to self-educate yourself regarding financial education. You have to learn from some mentor who has already made intelligent investments, and you can feel his results. Don’t entirely depend upon the brokers, friends or business agents, first educate self.
You Wouldn’t Become Wealthy By Single Source Of Income
Can you write on a piece of paper how many expenses you have? On average, anyone can have at least ten such costs. It may include food, rent, travelling, cloth, children expenses, entertainment, EMI, electricity etc. But if I ask how many sources of income you have? Then the majority will say they have only one source of income.
So, my next question is, why cannot we build multiple sources of income when we have various expenses? And this is where wealthy people are entirely different from ordinary people. For example, whether you believe or not Mr Warren Buffett has more than seventy sources of income. And by the way, he is one of the richest men in the world. In today’s world, you must have at least three sources of stable income. One can be your regular salary, other being income from your investments. Think about it, learn it, risk it but do it.
Learn To Pay Yourself First
If you are working for some company or if you are a government employee, then you must pay income tax. As soon as you start working and comes under the income tax slab, you have to pay the fee to the department concern.
Higher your salary, the more you have to pay. Those who are young don’t know how to save themselves from this situation. So, you need to learn to pay yourself first. One way is to start investing in insurance against which you can claim income tax returns.
That’s why many people purchase and show what kind of premium they are paying every year, and based on that they submit their claim and get the refund. This way you can get back some part of your money from the department concerned.
Another thing which you can do is to keep aside ten to twenty per cent of your salary first thing once you get the salary. Just save it and don’t use this amount unless you need this for some very urgent work.
Power Of Compound Interest
Recently, I came to know about the effect of compounding interest, and I was shocked. We have learned that we get annual interest on our fixed deposit or saving account and, this is an example of simple interest.
Now let’s understand compounding interest. The best example is a systematic investment plan (SIP). It is a scheme offered by many mutual fund companies where you can invest even a small amount, i.e. Rs. 500/-
In the case of compounding interest, we earn interest even on the interest amount which we received on our principle amount. Many wealthy and financially educated people know about this method, and they use it wisely. But this method works well only in the long run.
Remember these pieces of information are available, but it is up to us to understand and use them wisely. Wealthy people love to acquire knowledge, and they educate themselves in every aspect of finance, especially investments. They create their system which keeps on generating wealth for them. I hope this article will give some ideas to study further and help you to start your journey.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2020 Vikram Brahma