Introduction
In this blog, I’m going to tell you our 3 core principles which will answer your question regarding “how to become rich?” and helps you to achieve your financial goal and retire early. But first of all i want to warn you that if you don’t like to do a job or work then no one in the whole world could help you to succeed. The reason is simple work or a job is not your real enemy, your real enemy is not knowing how money really works.
If you don’t believe in my words then start looking for someone in your society and I believe that you will find someone who is engaged in some type of job – whether government or private – but still they’re financially strong and wealthy. They have huge amounts of cash in the bank, personal car, house, and so on. And most importantly, they are happy.
I’am currently staying in Delhi and I’ve met many people in my regular day to day life who are engaged in a simple job and doing very well financially. Many of them don’t only have their personal home but they also have at least one house which they had lent out. some people have made such a passive source of income that they don’t need to do any job.
So, how they did that is what I’m going to tell you in this blog.
First thing first
Before I tell you our 3 core principles, I’m going to tell you a few things that you need to do from now on, if you want to live financially independent and happily.
a) Delay the gratification
We humans have a tendency called unable to delay gratification. In simple terms, if we ask to either fulfil a desire today or in the future, then we probably choose to fulfil it today.
It’s the root cause of failure in making wealth because the real meaning of investment is delaying today’s gratification so that you can fulfil your future’s desires.
For example: In feb 2021 one of my friends told me that i am going to buy an apache bike which was going to cost him almost Rs 1,30,000. I told him “because you already have one bike which can fulfil your need, i prefer you to buy TVS motors share selling at Rs 600/share which ultimately going to give you 216 shares”. But due to being unable to delay gratification he ignored my idea. Today this share was selling at Rs 1900, if he had invested as per my advice today his investment would become almost Rs 4,00,000 which means you can now buy a bike for free and have net worth between 2 to 2.7 lakh.
b) Don’t forget why you are doing this and avoid avoidable expenses:
If I ask you why you are doing hard work in your life then what is going to be your answer? Most of you will say to earn money. If this is also the answer of yours then you need to ask one more question: why do you want to earn money?
Most of you will say, for family, for myself, to buy luxury houses or accessories, or so on. But for all of this you need good mental and physical health.
We are nowadays so busy in our life that we completely ignore the importance of good health. Tell me does it really matter to you, if you become rich but you are not physically or mentally well to enjoy it? Or you are doing this so that your next generation will waste your hard earned wealth to enjoy lavish life.
If you are able to take care of your health then you are going to save a lot of money that you are going to pay for treatment and medical bills. Otherwise, this can later be used for investment.
A wise man once said “ Precaution is far better than Cure”.
c) Don't hate your job:
Nowadays a new trend comes in India which says that doing a 9 – 5 job is a trap, you should move out from it and start your own business.
This is completely true, if you’re dependent on the pension plans after retirement and haven’t built any wealth for retirement, whereas in the opposite case if you’re able to retire with at least a few crore in form of cash and other assets then your job is not a trap instead it helps you to build such a fortune.
You need to remember that working at a startup and business is a very hectic job and probability to succeed is low as compared to investment. Whereas in case of investment, you are working as a sleeping partner -means you don’t need to take part in business- but you’re going to be paid equally as owners get, in form of dividend and share price appreciation.
If you look in any successful company then you will find that there are basically 2 sources of earnings for the owner i.e., active and passive. Active source is their salary and passive source is dividend and capital appreciation. In simple terms, we can say that the owner is also an employee and doing a job, then tell me why you dislike your job.
d) Continuous learning and skill development
You need to spend every day learning and improving your knowledge and skill that will ultimately help you to do your work or job more efficiently and effectively. Furthermore it’s always advisable to learn and acquire knowledge beyond your field.
Doing this will help you to get promoted in your company and increase your income as well, which ultimately also helps you to invest more and retire more early.
If you’re ready to do what I’ve just talked about, then our 3 core philosophies will help you build huge wealth and retire early.
Our 3 core principle
a) Savings
The first principle is saving a portion of income every month till the size of investment becomes so big that you feel that now it’s time to retire.This is totally like sowing a seed. If you want to reap early then you need to sow as soon as possible.
As a rule of thumb you need to invest more than 10% of savings every month, it can be as high as you can afford but it should not be less than 10%.
The main point is that you should, need to learn and be able to save your hard earned money, because in this competitive business world everyone wants to take your money by providing goods or services whether you really need it or not.
If you don’t believe in me then think in that way what are the main sources of earnings for platforms like youtube, social media and websites? If you don’t know then it’s Ads revenue. So, why are companies paying us huge amounts of money to run Ads? The main reason is to pollute your mind and sell you what they like to sell, whether you like it or not.
Our main focus was on happiness not on convenience, luxury and focusing on the lead of this marketer or herd of middle class who aims to show off to the society.
But here I am going to warn you here that you don’t need to become too shabby in this process and save too much and live your life completely like an ascetic because no one knows for how long a person can live and for this you need to know the difference between need and wants.
If you have a need for a mobile and android mobile can fulfil your need then you can spend it and fulfil your desires but instead you want to buy an iphone then i advise you to think about it again because this amount if saved and invested then it could give you better return.
Now i’m going to give you some ideas related to how you can cut your life costs:
If you’ve taken a debt then you need to first use your savings to repay debt. Otherwise no matter how much money you put in your pocket if there is a hole in it then it will be a fortune for others.
Avoid taking debt to buy a car, bike, etc then looks like assets but works like liabilities. Like in the case of a car its price is going to deflate in future whereas if you take proper caution and invest this amount in real estate then its price will most probably inflate in future.
If it’s possible then you should need to live close to work. This will not only save your money but also save your time.
Cancel your subscriptions from multiplatforms.
b) Investment:
Now when you’ve sowed the seed, your next step is to water it regularly.Which means you should need to invest it to create assets.Nowadays, there are many ways of investing available to us.
You can invest it in ETFs, gold ETFs, mutual funds, equity shares, real estate, for your own house, and so on.
You should diversify your investment in more fields like some percentage in stocks, mutual funds, real estate, and most importantly some in the form of liquid assets like FDs or in cash, in case of emergencies otherwise you may end up selling your stocks or real estate for lower value.
I see many real life cases in which people have to sell their property at a very low value due to urgent cash requirements. So, you need to take care of it.
c) Reinvestment
What usually happens is we’ve started doing saving and investment very well but didn’t do reinvestment and that will completely change the story of ours and successful investors.
Successful investors not just do saving and investment but they do something more that completely change their story and make them most successful.
What they basically do is whatever they’ve earned from investment in form of dividend and capital appreciation from stocks or from sale of real estate they don’t touch it to fulfil their desires instead they again invest it whereas what general public do is whenever they receive dividend from stock they use it to buy something for themselves.
I have a real example of this which happened in my family. One of my family members sold one of their property and used the proceeds for finishing the touch of a personal house and to buy a car.
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Alright, team, get ready for the kick-off to your journey to wealth! Procrastination is the enemy, and time is a relentless sprinter, so let’s not be caught standing still. As the saying goes, “the sooner you plant the seed, the sooner you’ll be reaping the fruits.” Share your thoughts in the comments below and let’s make moves!
