According to Suvigya jain Singhi to be financially savvy it is very important to have the right habits and save from the beginning.
These are some tips on how to become wealthy by the time you are 50:
- Starting Early
It is very important to start investing early if you wish to reach your financial goals. For example if you are 21 when you start earning then you should invest at least 30 percent of what you earn. For example if you earn 21,000 rupees then you should save at least 7000 rupees a month. As you have time on your side your investments will grow and you will become wealthy by the time you are in your late forties. Starting to invest and save early makes all the difference.
- Magic of compounding
Suvigya Jain Singhi says Compound interest is magic and it can make you wealthy super quick. The key is to regularly invest. Be it a SIP of a Mutual Fund or be it a top up in a fixed deposit. The more you invest and the more time you stay invested you will get the benefit of compounding and you will reap rich rewards with time.
- Eggs in different Baskets
While investing it is also very important not to put all your eggs in one basket. You should spread investment portfolio and include FD, Mutual Funds, Insurance and Gold Bonds. This way as you have spread your investments you will stand to be a winner even if one of your investments crashes and you will always be safe and earn a healthy rate of growth due to the law of averages.
- Financial Goals
You should when you are young set your financial goals so that you are able to meet all of them by the time you are in your late forties.
Your financial goals can include:
- Buying a House
- Children’s Education
- Children’s Marriage
- Pension Fund
- Buying a Car
- Medical Emergencies
If you start planning and investing early then you will be easily able to meet all these goals and remember to never put all your eggs in the same basket.
- Right Habits
To win in the finance game it is very important to have right habits from the very beginning. You should not do impulse buying and avoid unnecessary expenditures. In short you should stay away from depleting assets like expensive gadgets and clothes. This way you will always be financially sound and have a big buffer on which you can rely on.
Also you should stay away from credit as that is a major expense and you end up paying a lot more for the same thing. Warren Buffet says that “ IF YOU BUY TOO MUCH OF THINGS YOU DON’T NEED, SOON YOU WILL HAVE TO SELL THINGS YOU NEED”. So keep this in mind while spending.
- Save Before you spend
You should make a habit of saving before you spend and then you will never have to take loans or credit. Thus you will always be financially sound and have money when you need it the most.