Robert Orben, American comedy writer, has said,
“Every day I get up and look through the Forbes list of the richest people in America. If I am not there, I go to work. And that is where, my friend, you need to go to, so that you get rich.”
Is it so tough to be rich? May be yes! Effort is indeed required and if you want to be filthy rich, I believe you can never settle down for average…Strive to be the best so that your monthly income as well as variable pay makes you richer and richer.
And then when your bank balance spikes up, you need to learn how to manage your hard earned money so that you stay rich forever! Be cautious and avoid the following money mistakes.
For a richer tomorrow, live a poorer today
Someone had once asked Warren Buffet, “Why do you being so rich travel in economy, while your children travel in the first class?” He replied with a smile,
“I did not have a rich father.”
Do not escalate your style of living too drastically just when you start earning a little more money. Spending money only to satisfy your vanity or to impress others is not at wise. Sort out your requirements and spend accordingly. If you have excellent public transport, reserve your car for special events.
Choose your spending as wisely as your investments. Lesser spending translates to a richer you.
Never exceed payouts towards your loans 20% of your net income
Let me tell you a story here.
A couple has a house, a TV, refrigerator, washing machine, microwave, air conditioner, and everything one could ask for, but unfortunately, all on loans. They have to pay off the installments for all of these monthly. When the lady gives birth to a child, and they get the child back home, she tells her husband, “Please pay off the hospital bills first. At least let the baby be our own.”
So the moral is here…
Owning houses, vehicles and commodities have become much easier. Thanks to the loans that are so easily available. While the good thing is that we can buy things early and easily, the trap is that we get too much into the mortgage world and paying them off becomes a burden.
So, choose loans wisely. All the installments put together should never exceed 20% of your net income. That will keep you comfortable. Always remember loans are purchasing money, and the cost is interest. So choose this option only when you really need it.
Never underestimate the power of savings
There is a lovely joke, “They say money talks, but all it said was goodbye to me.” Don’t let money slip out of your embrace. Save.
Savings may sound dull, boring, and so uncool to you, but the truth is it helps to procreate money. Surprisingly the more you save, somehow it grows magically at a larger rate. Allow this magic to work for you always.
The catch is – do not bite more then you can chew! Yeah, fulfill your desires for luxury travel, branded clothes, high end gadgets and cars and other lifestyle needs, but do not get carried away and burn all your savings! Keep the balance right.
Invest wisely. Take professional advice.
A smiley. “The only way to make a killing at the stock market is to shoot the broker.”
The stock market moves as fast as Michael Jackson wriggles his legs. But then, there are so many people who invest well and become rich.
Investments are subject to market risks, but investments make you rich. Choose your investment wisely and remember that Rome was not built in a day, and similarly your investments won’t. So wait, and hold on well. Let the market ripples settle your investments into a smooth sailor. Identify good professionals if you need advice.
Never let the consultant handle everything without your attention
This is one of the best joke on consultants I have heard. A consultant walks in to meet the client and says, “This is the one of the shortest financial reports that I am presenting. We had money, now we don’t.”
Let this joke never become a reality with you. Take stock of your investments even if you have a consultant. Spend time at least once in a quarter to speak to your consultant about how and where your money has been invested.
Keep a stock of all the papers related to your investments well. Never let this be an unsupervised outsource. It is your money and the consultant can only prescribe. You decide, you take care of your stock always.
Never choose plastic money over cash
It may be a fad or a matter or convenience, but credit card has its own vices. You end up spending a lot more than you would with cash.
The pain of letting each note of cash slip out of your hand will always keep your spending under check. Credit card on the other hand is convenient, because it allows you to spend even what you do not have. Moreover, most of the time you will have no idea how much you have already spent till you get the bill.
“Procrastination is like credit card. It is a lot of fun until you get the bill.” – Christopher Parker
Never pile up your bills. Pay them off
For all the usage on credit cards, there is a bill that will glare at your face blatantly every month. To make matters simpler, but actually worse, there is an amount said minimum amount payable which will allow you to keep using the credit card. But what is not explicitly mentioned is that this money is very the expense. And on the top of that you have to pay huge amounts as interests on delayed payments.
So be it credit card, electricity bill, rent, etc. etc. make sure you clear off within the specified time.
Do not miss out on renewal dates and balances
Make sure you know your financial status. Check all your bank accounts, FD receipts, all investment receipts for the renewal. Avoid wasting days on renewals. Interest earned is money gained and interest lost is money lost.
Check bank account balances time to time. Banks charge interests on unmaintained balances.
These may seem little, but will help you to get into the habit of taking good care of your money.
Let’s end with these intelligent lines from Will Rogers “Too many people spend money they haven’t earned, to buy things they don’t want, to impress people that they don’t like.”
If you want to be rich and stay rich forever, then along with earning money, you must avoid making the aforementioned money mistakes that will stunt your financial growth.
Author – SuccessYeti