When we used tho run a brokerage outfit (a decade and a half ago) we had to do a credit appraisal of all clients – and do it regularly. Our Chairman had a simple yard stick – a guy who came in an Alto would get whatever credit he asked for. However a guy who came in an Audi or Merc had to be kept under surveillance for 3 months before giving him any line of credit (remember as brokers we made far far more money from lending money than from brokerage – true even today).
We would always talk of ‘being rich’ and ‘looking rich’ and how the two things were very different. Life style creep has to be prevented..and you should know how to do that.
- Make sure that you have your goals written down
- Make sure that you are investing aggressively enough for the goals
- Increase your standard of living slowly and confidently
- Reduce outside influences
- Do a lot of exercises and learn meditation
When your income increases there is a tendency for many people to increase one’s standard of living. However, nothing like this can happen if you have your goals written down. Then you allocate the moneys to various goals – towards children, yourself, etc. When all these allocations are made, there will be no chance of some unnecessary spending.
Make saving money easy by automating as much as you can. Here are some things that you can do: Sign up for a SIP by going to an agent or to the fund website. You can also use a pay raise as an excuse to TOP UP your SIP automatically on an annual basis. This increases your retirement savings and lowers taxes!. Just ask the payroll person at your office and they’ll walk you through the process. Taking just 20 minutes to automate a few money transfers will make a huge difference in how much, and how easily, you can save. Any time you get a raise is a good time to reevaluate how much of your salary you’re allocating to savings or retirement.
Increase in income has to be more aggressively allocated to investment avenues. Bonuses can be treated as follows – use 1/3rd to pay off debt, 1/3 for retirement fund and 1/3 for current increase in consumption. Such planned allocation allows you to increase your standard of living coolly and cautiously. This is nice and desirable.
Stop worrying about what your neighbor, friend, sibling, colleague think about you. Honestly he or she is busy worrying about what YOU think. LOL. Get your #$%%^& ego out of the way. Sadly, nobody is thinking about you. Go to bed.
Finding nice hobbies – which are very taxing like sprinting, running, cycling will help you improve your health too. Stop the life style creep that is happening. You must have noticed by now – having more does not necessarily make you more happy.
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