Dream of owning a house by the beach or taking a trip to an exotic place? Becoming rich is a dream we all have. Though it may seem far-fetched for some, there are many who have cultivated a few key money habits that are proven systems for getting rich. Being wealthy is not just about how much money one makes, it’s about your mindset towards how you use the money. Tweaking a few money spending habits and avoiding certain financial mistakes can put you on the right track to being wealthy.
Millionaires cultivate money habits and qualities that are a notch above the rest. If you are one among those who are already on the right financial path, here are 5 signs to know that you will become rich one day:
1. Avoid instant gratification
If you are able to resist your ‘I want it right now’ temptation, you have successfully overcome your first obstacle towards money creation. Instant gratification can be an expensive affair in the short term and it can snowball into a bigger problem if it can’t be controlled. A saved rupee can help you on a rainy day or if invested with diligence, it can increase your wealth over time.
2. Pursuing your passion relentlessly
If you are investing enough time in making yourself better at your work, your income producing ability is sure to increase. Likewise pursuing your dreams relentlessly often pays rich yields overtime, this is usually never without its share of doubts, struggles and even possible rejection and dejection. When you are great at what you do, it surely shows and pays well. Be great at what you do!
3. Frugal yet balanced living
Do you follow a certain level of discipline while spending? Do you put your needs before your wants? One’s decision to make the most of their hard earned money lies in the choices between needs and wants. Truly wealthy people don’t flaunt their money. From Mark Zuckerberg’s simple wardrobe choices to Warren Buffett’s modest home, some of the wealthiest people are the most frugal. Our spending pattern has a significant impact on our finances and wealth. Cutting down on things that aren’t necessary, avoiding eating out everyday or choosing to live in a modest yet comfortable apartment are some ways to save up more.
Does your budget dictate the way you save and spend money? Your path towards becoming rich starts with a definitive plan to effectively allocate your money. A good budget is the first step towards a good financial plan. Creating a category for each expense and a monthly evaluation of your expenses on needs and wants can help you spend less and save more. If you already have a clear picture about your expenses and incomes, it’s easier to cut down on unnecessary expenses that do not fit your budget
5. Invest whatever you can
Being rich is not a question of one’s ability or fortune or even a sense of entitlement. The question of why one is not wealthy can in most cases be simply attributed to the fact that they are not being investors. Most times we think a large sum of money is required to start investing. On the contrary, much like little drops of water which make up the mighty ocean, small sums of money in the form of Systematic Investment Plans (SIPS) and the right mix of assets over time will make you wealthy.
(By Santosh Joseph, Founder and Managing Partner, Germinate Wealth Solutions LLP)