Wednesday, December 23, 2009

Wealth accumulation mantras!

Hi there! Have you ever thought how do you build wealth? I am sure this thought must have cropped in your mind many times. Well you are not the only one, who wants to be wealthy. Believe me every other human being thinks the same way. One of my well wishers told me that there are four roads to wealth

You can marry it: Well some do that but I passed this stage 3 years back!!

You can inherit it: Not an option in this life or may be I need to find a rich relatives :(

You can get a windfall: Could be an option if I sit down and wait for my lottery or some other unexpected good fortune or

You can accumulate it: This sounds to be the wisest of all options given my current state of affairs

Accumulate? It is not that easy but it is not that difficult to if you follow the below mantras
  • Live within your means: These consumer driven economies push anybody to buy the new gadgets, clothes etc one after the other. Most of us go after the brand names, pay lots at time and forget the principal ‘save first, spend second’. Follow the mantra of living within your means and you will realize growing wealthy is not that difficult.
  • Save aggressively: Set a goal and go for it. The earlier you start, the upper hand you get in accumulating wealth
  • Manage your taxes: Have you ever considered how taxes are your biggest expense in life - more than mortgage expense, education expense, or any other expense? So, you must take advantage of all tax breaks available - each and every single one of them.
  • Be patient: If you have been investing in the market you may have realized by now that time in the market is more important than timing the market. ‘The market has a very efficient way of transferring wealth from the impatient to the patient.” - Warren Buffet. So if you are thinking of accumulating wealth, you need to follow Buffet Uncle here J
  • Periodically re-balance your portfolio: Take gains from the best-performing assets and buy those temporarily out of favor.
  • Get advice: Never underestimate the value of good advice. Someone who manages investments full time certainly will find things you have overlooked or done wrong. A good financial adviser is like a personal trainer for your finances and can get you on track and keep you there until your goals are met.


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