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11 Financial Mantras To Get Rich and Generate Wealth In 2020

Finance Guru Speaks: Do you want to Become Rich and Generate Wealth in this new year? Well, who doesn't want it! This article will pr...

   

11 Financial Mantras To Get Rich and Generate Wealth In 2020


Finance Guru Speaks: Do you want to Become Rich and Generate Wealth in this new year? Well, who doesn't want it! This article will provide the 11 most important tips and mantras that will help you achieve financial freedom and generate abundant wealth sources.

Tips to get Rich and generate Wealth
financeguruspeaks.com - Tips to get Rich and generate Wealth

Without further ado, below is the list of 11 Financial Mantras to achieve Money, Wealth & Financial Independence:-


1.     Financial Discipline and Diversification:

Save and invest a certain sum from your total income to generate your base portfolio. Base Portfolio will provide you financial stability and can face even adverse economic situations.

Depending on your investment style, financial commitments, and risk allocation; you can choose various financial instruments like SIP in Large Cap, Mid Cap or Multi-Cap Mutual funds, Recurring Deposit, Gold, etc. Make sure to diversify or divide your investment amount in different instruments for risk aversion.

2.     Generate Assets and beating Inflation: 

Always strive for increasing your no. of Assets that generate money from your invested money. Examples of Assets can be Mutual Funds, Fixed Deposits/Recurring Deposits, Gold Bonds/ETFs, Rental incomes from Real Estates/Commercial properties, RBI Bonds, etc.
   
While choosing Assets, consider 6%-8% of the Inflation rate also so that your returns can beat the future currency devaluation. In other words, choose diversified Assets that provide atleast more than 7% of annualized returns.

3.     Savings & Financial Habits in Kids: 

This is the most important mantra for securing the financial future. Our Education system doesn’t teach about Money and handling Finances.
Inculcate habits of Savings and wise Spending in your Kids right from the age of 7 to 8 years. You can play some good Money & Wealth related games with your Kids like Monopoly, Business, Game of Life, etc. In this way, you can easily teach Money handling skills via fun-filled activities.
   
You can visit GET RICH link to find out good Money related Games and Books for yourself and Kids.
Tips to get Rich and generate Wealth
financeguruspeaks.com - Tips to get Rich and generate Wealth
4.   ALWAYS "Investment" First:

Always try to Invest first, then Save before spending on your expenses.
So, your spending equation should be:-



Tips to get Rich and generate Wealth
financeguruspeaks.com - Tips to get Rich and generate Wealth
5.     Keep Aside Emergency Fund:

Keep an amount aside which is equal to 10 times your monthly income in a Fixed Deposit or Debt Mutual Fund. E.g. your monthly income is 50,000 so always maintain an emergency fund of 5 Lacs in a decent quality Debt Mutual fund or a Fixed deposit. This will provide you the financial cushion for your family incase of any mishaps like losing jobs, etc.

6.     Get Insurance but don't mix it with Investment:
   
Get yourself adequately insured in the below order of sequence:-
  1.       Life Insurance with Accidental Coverage
  2.       Health Insurance with Critical Illness Coverage
  3.       Vehicle/Motor Insurance 
  4.       Home Insurance.



Tips to get Rich and generate Wealth
financeguruspeaks.com - Tips to get Rich and generate Wealth
Never mix your Investment with Insurance. The purposes of both these are totally different. If you mix both by investing in ULIPs or Endowment Plans, then you may never achieve proper returns on your investment as well as adequate insurance coverage.

7.     Handling and Avoiding Loans:

Some people talk about Good Loans and Bad Loans. Well, there is nothing like Good Loans in the current unstable financial environment. Try to prepay your loans in the sequence of:-

  1.       Credit Card Loan
  2.       Business Loan
  3.       Personal Loan 
  4.       Vehicle Loan
  5.       Home Loan 
Also, incase you are not able to pay your loans on time, then contact the financial institution and explain your situation. Depending on your investment relationships, you may be offered some flexibility or deductions from them. No harm in trying though!

8.   Goal-based investment:

It’s a good practice to tie your financial goals with each investment amount. Suppose, you have a goal of your Kid’s education and for that, a sum of 25 Lacs is required after 15 years. Then you can start your monthly SIP investment of 10000 (considering a return of 11% compounded annually and inflation of 6%). In this way, you can instill the discipline of monthly investment based on your goal and avoid frequent churning or stopping the investments.

9.   Review of Equity Portfolio periodically:

Try to review your Portfolio (especially Equity portfolio of Shares & Mutual funds) after every 6 months. Compare the funds/shares with the equivalent market index as well as Peers. If performance is not upto the mark for consecutive 3 times, then either start systematically withdrawing a certain sum every month or transfer a fixed sum in another fund of the same fund house incase of Mutual Funds. Remember, Performance Review is a very broad process and we have given just one of the methods. You are free to do some more innovative thinking before you make a decision to withdraw or transfer money from your underperforming equity investments.

10.  Income Tax:

Always pay your Income Taxes honestly on time. Make full use of all the tax exemptions available while filing the IT returns. Remember, peace of mind & rightful earning is equally important as getting richer.

11.  Spending Wisely:

In this digital era, money is just a click or swipe away. Keep a watch on your spending/expenditure before you swipe your Credit Card or Pay via Internet Banking or Mobile Wallets. Many times, due to ease of availing money, we overspend and buy items that were not really required. If you are a very frequent buyer from Online Portal or Malls, then make a list of required items before you start buying and try to stick to the list only.

As we have discussed 11 important financial mantras for attaining wealth and financial independence, do remember to Help others. While every one of us strives to earn more and more, donating some portion to the needy will provide you satisfaction & a sense of compassion. Money has the habit of coming back to the ones who are ready to help others.

Disclaimer: This article is for education purposes only and the points mentioned may vary based on Investor risk profile and financial goals. Please consult your financial adviser before you make any investment decisions. Happy Investing!

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6 comments:

  1. Very informative and useful article!

    ReplyDelete
  2. Thanks dear Reader. Please share the article over your social networks.

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  3. Fantastic article, shared in various groups.

    ReplyDelete
  4. Thanks finance Guru. This will help to manage our finance.

    ReplyDelete

Thanks for your interest. Keep visiting.


Sincerely,
Finance Guru Speaks

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