How To Begin Your Journey to Become Wealthy

Published by Sharekhan Education | March 3, 2021

How To Begin Your Journey to Become Wealthy

Do you want to become wealthy? Sameer asked his friend Sumeet. Who doesn’t want to? He retorted. Surely it would be difficult to find anyone who doesn’t want to become wealthy said Sumeet.

But the question that we are going to address here is not whether you want to become wealthy or not but “How to begin this journey to become wealthy”.

According to statistic reports: India’s richest 1% holds over 40% of national wealth; whyis it that such a small percentage of Indians are wealthy and others are not? Have you ever given a thought tothis?

Wealth creation needs disciple, focus, commitment and ofcourse courage. Rome was not built in a day my dear friends. So if you want to become wealthy believe me it is not going to happen overnight.To embark on your journey to become wealthy you need to follow some rules don’t you think?

First and foremost you need to know yourself. You read it right, you need to know yourself. But the question that is coming to your mind is “Don’t I know myself already?” Well that is a good question. People often feel they know themselves but the truth is they don’t. So even if you feel that you do know yourself, well no harm in getting introduced again. Find out what kind of financial lifestyle you live (to know more read the article on Keeper, Consumer or Borrower- which financial lifestyle do you lead?)Are you concerned about the future or do you believe in living just in the NOW? Do you lead a frugal lifestyle or are you a spend thrift? Identifying your financial lifestyle is the first thing that will help you understand your relation with money.

Next have a wise spending plan. You need to get yourself a tailor made spending plan. That’s right a spending plan – a budget. To embark on your wealth creation journey you need to create your monthly budget and most importantly stick to it. How will a budget help you grow wealthy? A budget will sort out your income &expenses and will help you find the money that was evading you so far. You will be able to identify between the useful, needed and wasteful expenses and in effect get to the money that was just slipping through your fingers. So pick up a piece of paper or open a spread-sheet and bare the bones of your finances. May look tedious or boring to some but Do It! the basic idea is to spend within your means or even lower. Remember overspending will rock your boat but frugal living will steer it to safer shores.

Now that you know how thin you are spread you need to supplement your income; difficult task surely but not impossible. So find ways to earn more. Look for alternate income sources. You could maybe rent out that extra room in your house or opt for short term trading etc…

So you have done all the three above. Next would be to become an investor. So far you had many excuses for not saving and investing. Also a “maybe”,“may be not” when it came to savings and investing right? So now do what is right. Become an investor,start investing in equity. Direct or indirect doesn’t matter. History has proved that there is no better asset than equity to help you create wealth in the long term. If youlack the requisite knowledge, skills or time then indirect route to invest in equity would be fine. Select mutual funds best suited to match your goals, time horizon and risk tolerance.If you know how to select stocks then go right ahead. Start. Don’t procrastinate.

Your wealth creation journey has in fact now begun. It will take time to reach your destination; Remember Rome was not built in a day. To harness the power of compounding you need to remain invested for the long term. The longer you stay better the returns. So think long term and stay invested for 10 years or more.

Finally you need to clear your debts don’t you think? Remaining overburdened with debt can hamper your wealth creation journey or maybe not allow you to start.So have a debt management plan in place. There are many strategies that could help you get out of debt and a simple way would be to pay off your smaller liabilities first and then the larger ones. Take professional help if you can’t do it on your own. Channelize your surplus and or lower interest earning investments towards paying off your loans. Remember clearing your debts and not getting into more is vital.

To wrap it up it is important to start the wheel spinning. It is important to start investing and invest you must. So start your wealth engine ASAP;waiting till you are totally debt free, or till your income increasesare just excuses to delay your wealth creation journey.Start now. It doesn’t matter how much you invest, powered by the magic of compounding and supported by disciplined investing you can surelybegin your journey to become wealthy.

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Happy Investing!!