How to become rich in India fast: 5 amazing money saving tips to be wealthy
Money begets money – this is what is generally believed. In other words, this means that the more money you have and you invest, the more wealth you will be able to generate. (Reuters)
Money begets money – this is what is generally believed. In other words, this means that the more money you have and you invest, the more wealth you will be able to generate. This is also true, to some extent. However, this is not entirely true. For, it is not only the amount of money saved or invested, but also your wisdom and the propensity to save that makes all the difference!
Can you, for instance, imagine how much money you will be able to make over 40 years by just saving, say, Rs 50 a day and investing that amount every month in a saving instrument that gives just 8% return per annum? Rs 1 lakh, Rs 2 lakh, Rs 5 lakh – any guess? Nah, that is a staggering Rs 52.25 lakh, if the interest on your investment is compounded quarterly! Of this total amount, only Rs 720,000 is the principal amount while Rs 45 lakh is the interest earned. That is the power of compounding – “the eighth wonder of the world,” as described by Albert Einstein.
However, this is not all that easy do do. For this, you need a disciplined approach towards all your financial matters and consumption habits. Here we are taking a look at 5 easy ways that can be done:
Cutting Back on Eating Out: These days many people, especially working ones, avoid cooking at home and love eating out. True, giving yourself and your family occasional treats or eating out sometimes is not bad. In fact, it has become essential in today’s world for many reasons, one being that it helps you spend quality time with your friends and family. However, eating out regularly is not only bad for your health, but budget also. If you are able to save, say, only Rs 1,000 per month by cutting back on eating out, and invest the sum in a product that gives you 8% return, then this will help you generate close to Rs 5.92 lakh in 20 years. If you save Rs 1,000 for 30 years, then this will become Rs 14.94 lakh and in 40 years you will be able to accumulate around Rs 34 lakh! Is it bad?
Paying Bills on Time: All of us pay various bills every month, which include phone bills, electricity bill, gas bill, credit card bill, school fees, and maintenance bill (if you are living in a society), among others. We are also aware of the fact we have to pay late fees if any bill is not paid on time. However, how many of us pay our bills on time? The fact is a lot of people pay Rs 500 to Rs 1,000 every month as late fees alone and they have no regret. The problem in most cases is not of money, but of laziness. However, even if you are able to save, say, Rs 500 per month by paying your bills on time and the same amount is invested, then you can make big money over the long term. For example, Rs 500 invested every month in a saving instrument which yields 8% return, can generate around Rs 17 lakh in 40 years!
Avoiding Impulse Buying: We all love to shop. However, do you often purchase something and then get it home to find you aren’t excited about it any longer? Or that you just don’t need it? It happens with most of us. Therefore, if you are in the habit of spending on impulse, make an effort to have a moment of reflection before buying anything. If you are able to save just Rs 2,000 per month and invest the same every month in a saving instrument which yields 8% annual return, then it will help you generate around Rs 70 lakh in 40 years and around Rs 30 lakh in 30 years!
By Quitting Smoking: We all are aware that smoking is injurious to health. If you are also a smoker, but are now looking to quit smoking, then try to keep aside the money for every cigarette that you do not smoke. If one cigarette costs, say, Rs 10 and you usually smoke 20 cigarettes a day, then you would effectively set aside Rs 6,000 in a month if you successfully manage to quit smoking completely. Invest this amount every month in a saving avenue which yields 8% annual return, and it will help you generate around Rs 2 crore in 40 years!
Taking ‘Spending Freeze’ For a Week: Another important way to save money and keep a quality budget is by going for ‘spending freezes’ or taking a ‘no buy’ break for a week. This means during such periods, you won’t buy anything new or go shopping. Exceptions to the ‘no buy’ time might include paying for medicines, food and emergencies that come up like someone getting sick. Save the money you would have normally spent during the day or week you are on the ‘no buy’ break and invest that amount by the end of the month. This will also help you generate a big amount over the long term!