Wealth building strategies of the super rich will be discussed in this article. The wealth building strategies what we are going to offer to our readers will be easy to understand and even easier to implement. In order to implement these wealth building strategies one need not be a specialist of finance and neither is required to possess a high source of income.
Not only save but also take necessary action to make it fight against inflation
Like we pay income tax on our income, similarly inflation eats away your savings. Like a RS 10 today can purchase one kilogram of some vegetable but the same Rs 10 will not be sufficient ten years from. This process of rising prices is called inflation. The rate at which the price of goods and services is increasing, one must invest their savings such that it grows faster than the rate of inflation. The objective of protecting your capital against the wrath of inflation is called ?protection of capital?. Investment options like fixed deposits, debt linked plans will not be sufficient to beat inflation. At present the rate of inflation is nearing 10% per annum, this rate can only be defeated by equity linked investments or real estate.
Invest your savings on assets and minimize liabilities
Who does not want to buy that latest car, I-phone, LED TV, stylish dress etc, but this year the resolution should be to try to invest more on assets and minimize purchasing of liabilities like (car etc). It is also a fact that these things are required to maintain a standard of living, but this is where wisdom fights your immediate-gratifications. Sorry, do not get us wrong, we are not asking your to bring your liabilities spending to zero, rather we ask you to realize what is a liability and what is an asset. An asset generates additional source of income for your. The larger is your asset the larger will be other source of income. With your asset size growing, your dependency on your pay cheque will be reducing. Each asset will be one step towards your financial independence. So next time when you decide to buy that Rolex, think the same $1000 can generate future income. May be your income levels will not be good enough to beat inflation but still it will be better than spending it on liabilities.
Set your financial goals and review it regularly
Before you start saving and investing you must know why you are doing so. Try to list down and schedule all your future requirements of money. The requirements that are scheduled within next three years are short term investment goals; and the requirements scheduled beyond three are long term investment goals. Invest your savings in equity for long term goals and invest on moderate debt linked plans for your short term goals. There are so many people in this world who has made investment as one of their new year resolution, but in absence of investment goals these resolutions are seldom complied with.
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