Well I have seen people getting rich by doing a few things. Here I am not talking of doing business and taking your company public, that is for people doing their own business. This post is meant for people who are not in that area….

  1. Earn a Lot of Money: – there is no substitute for a large capital. If you earn a lot of money, chances are that you will do well even if your post tax, post expenses returns are a little pale compared to what you could have achieved. Get a good degree, work through all you vacations right from FyBcom or degree college, and make every rupee count. Get a good useful degree  AND learn a trade profession that pays well. It is much easier to earn well being a surgeon than by being a librarian. Face it, higher skills will get rewarded better which ever part of the world you are. It is easy to create a high net worth when your income is high. Keep learning when you leave college. A professional means an updated professional. Take sensible risks – do not be stuck to one geography. If you can earn better in Australia, Burma, or Canada – just go. Have an owner attitude – even in your job, suddenly you will find it attractive to be your own boss. Have a money earning attitude without being greedy or miserly – REMEMBER you are the judge not the people around you.
  2. Spend Sensibly: Start saving early. There is a lot of value for the money saved / invested in your 20s. By the time that money reaches your age of 50, the cricket ball looks like a foot ball! Remember the power of TIME! Rent all that you need – a taxi is better than owning a car, and you are better off paying Rs. 7400 rent for a house with a market value of Rs. 70 lakhs (confirmed figure, and the owner pays for the society maintenance). Not only car and house, but keep away from Timeshare and such other shit thrown at you regularly. Splurge once in a while – so that cutting back in bad times is easy – or at least not difficult! Buying cars /house / boats (!!) etc. with borrowed money makes money for Hdfc, not for you. Be prudently frugal, smart, sensible and selectively extravagant – in say travel. Make sure that you spend money on what you value most NOT what society will think. Frankly society does not care a damn. Normally if you can not afford to pay cash for something, you can’t afford it. The only exception is EDUCATION or Training. For housing if you cannot afford a 40% down payment and have enough cash to pay for stamp duty, furnishing, etc…STAY AWAY. Marry well, marry once, marry someone who is physcically, mentally, and financially compatiable with you – make sure you are acceptable to the spouse’s family too. Make sure that the credit cards are just for convenience – and it is not meant to accumulate credit.
  3. Work hard and make sure your money works hard too: To make sure that your money works hard you need to do some sensible things. Those steps are: invest in simple products that you understand, invest heavily in financial education. When trainers and bloggers keep drilling ‘term plan’ in your head, the industry (and the people dependent on ads) create toxic products and call it ‘Term plan’ – actually these are endowment plans made to look like term! So a continuous education is a must. Check out for products sold by banks – you can be sure that they are the most expensive and toxic combination of products. Read Subramoney and in Subramoney read http://www.subramoney.com/2011/06/investing-books-the-must-read-types/ and read all those books one at a time. Make sure that you buy a simple term insurance, have one or two savings bank accounts, one credit card (always paid on time), one medical insurance (from a government service provider), one index fund. Once you start understanding mutual funds diversify into large cap, mid cap, micro cap, foreign funds,…etc. Learn, learn, learn – be hungry for learning – in this case money. Minimize taxes. Know the basics of the personal taxation. It is simple. Max out 80C, 80D, etc. Keep investing expenses low. Understand basic financial calculations, compound interest, time value of money, risk, and the expected rate of return of various financial assets. Know how to use commercially available calculators, the excel functions-FV, XIRR, IRR, etc It is possible to feel happy with a simple financial life. Automate expense and investments. When you are young, the amount of money that you save / invest is far, far more important than what you save/ invest when you are older. When you are older, the rate of return that you are getting is far more important……How to get rich follows….


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  1. Subra Sir ,
    Great Insights as always ,sir if I may ask you have mentioned that one should avail medical insurance from a government service provider only , why so if you can elaborate bit further .

    Disclosure : I have health insurance from a private health insurer (Max Bupa)

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