Time-tested method to grow money

The most commonly accepted notion regarding wealth creation can be summed up as follow spend less than what you earn and then invest what remains wisely to grow your wealth. While there is a perception in this thought, over some time you might realize that executing this idea of wealth creation is not that simple.

Time-tested method to grow money

In fact, over time, most of us realise that the greatest obstacle we face in building our wealth creation is often our behaviour and investment biases.

There are some golden rules to wealth growth derived from years of general patterns and tendencies, that, if you applied appropriately, then can make you wealthy beyond your dreams.

Having a Passive Source of Income 

Most people failed to realise that the ability to free up time and not have to spend 7-10 hours working every day is an accurate measure of wealth. The only way you can accomplish this is by generating sources of income that generate wealth by themselves without linking any work. One of the ways to create a passive income lies in asset investment.

Educate yourself financially

When it comes to finances, the utmost people incline to favour the easy route and get attracted to get-rich-quick schemes. They blindly trust experts, don’t strategise, make emotional decisions or start believing that making more money is difficult. Educate yourself and stay up-to-date with financial matters.

Set objectives and plans

Furthermost people aren’t able to achieve their financial goals due to poor planning. The accurate method is to take a piece of paper and write down the amount of money that you want, how you plan to raise it, and how you aim to utilise the money you earn. The more your objectives and goals are clear and focused in the plan you are about your approach, the easier it is to follow your plans.

Managing Surplus Income Efficiently

Creating wealth is not about how much you earn, it's about how you manage your surplus income. A surplus is the amount of money you have obtainable for investment over and above your expenditures. A shortfall will exist if there isn’t enough income. You can increase cash flows by eliminating unnecessary spending and increasing income.

Index mutual fund/ETFs vs active mutual fund

Both funds fund and actively managed mutual funds allow investors to invest in n variety of assets.

Index mutual fund/ETFs vs active mutual fund

Index Fund is a portfolio of stocks or bonds that are designed to mimic the performance of an index. It is a sort of investment that tracks a market index.

An Index fund is best for someone who doesn’t have lots of money and just starting to invest. This probably would allow them to achieve diversity in their investment without spending hours learning how to invest.

Index funds have lower fees as compared to mutual funds. It allows you to diversify across many companies and sectors.

An active mutual Fund is a fund that invests in a variety of assets, which includes stocks, bonds, and short-term debt. It is a professionally managed investment fund that pools money from different investors to purchase securities.

Mutual funds are just like index funds, invest in a variety of assets, stocks, bonds, etc but they are trying to beat the market. Since they employ a fund manager and research team, the cost is higher than an index fund.

Irrespective, index funds or actively managed mutual funds may be chosen by an investor. Usually, themes and large-cap index funds are more popular.

I will start investing from tomorrow

“I will start investing from tomorrow” most people delay their investment decisions because either they don’t know how to start or they have not given any thought to their future life.

I will start investing from tomorrow

Any person who wants to start investing must be at least aware of the basics of investment.

As a beginner, you should read as much as you can about ‘how to invest money successfully’ that would build your investment basics.

Everyone has a unique investment style. A skilled mind can set rules which not only match the investors' mindset but increase the possibility of high returns.

Investment is a procedure of purchasing assets to generate returns. The generated returns can be in the form of regular income or capital appreciation.

Everyone should invest money to take care of their future needs of life.

If you delay the decision to tomorrow, you are delaying your financial freedom.