"Habits are more powerful than you think."
How money can be made using The Power Of Habit?
Just like habit of brushing twice a day helps keep your teeth strong and shiny, A healthy lifestyle keeps diseases away, saving and frugality are some good habits to become wealthy. Disciplined financial habits can safeguard you on a rainy day and allow you to live a wealthy and prosperous life as well.
Read and learn about the 12 essential habits for making money and compounding it!
1. Be Creative Thinker
Do not follow herd mentality, don't be satisfied with just doing the tasks given to you, put extra effort. Always try to go beyond the limits while putting effort into any work. Always try to improve yourself everyday. "Power of compounding works everywhere".
If you can solve people’s problems and consult them with a feasible solution , you won't feel short of money. This can only be done using your creativity and habit of putting extra effort in that task.
In the long run, being a creative Thinker will help you raise your potential earnings.
2. Reward yourself
You can also say "PAY YOURSELF FIRST". If you realise that investing in a pension fund or for your kid’s education is JUST helping you to save MORE later on. Richest man in Babylon also advocates this theory of paying yourself first.
Paying yourself first from your salary and investing it, will help you in creating wealth to secure your old age with financial independence and create a cushion for financial emergencies. Without savings, people can suffer a lot of stress.
3. Create Multiple Sources Of Income
You can add multiple sources of income from which you could earn more. For example, one may try freelancing, coaching, blog writing or content creation apart from their regular job. Many people also start affiliate marketing or YouTube channel to build a alternate source of income.
Most of the people only have only one income stream, which comes from their job. While Millionaires derive their wealth from a no. of sources. They are getting money from:
- Profit from investments
- Profit from rental properties
- Dividends
- Digital Products
- Any services
- Affiliate marketing
4. Develop a Skill
"Keep Learning, Knowledge is power."
If you want to grow your wealth, you have to start learning. It will help you make yourself better in any field, especially when it comes to investment. You have to stay updated with every single event and news related to your invested company or sector. For example, you are planning to buy shares of a company that sells EVs. And, it is also the time when there is a policy decision which favours the policies regarding pollution,carbon emission, battery or renewable energy. Then buying the shares of this EV manufacturing company could be the right decision. The more knowledge and understanding you will have, the better you will be able to understand and make a sound decision.
In the era of high level of competition, Develop abilities that set you apart from your competitors. You can differentiate yourself from other people by updating yourself continuously and have a competitive advantage over them.
Also Read: "Compound Interest, 8th Wonder Of The World": Start Early, Grow Big.
Retirement Ahead: Financial Planning and Investment Options for Retirement
5. Start Investing.
You could not relay on your job always. Only your habits of saving and investing will allow you to continue living the way you want to when you are older. If you are not making investments, you will be forced to keep working 9to5 and will always be fearful about your financial conditions.
Frugality is not the smartest way of making money. There are many opportunities out there. Look for a good investment opportunity according to your risk appetite and start putting your money to work.
Investing in various asset classes can help you to create wealth in long term. Equity mutual funds, Direct stocks. Assets like gold and silver, Bonds and fixed deposits are some types of instruments you could invest in. You could also invest in land and rental properties.
6. Use Your Employment Benefits
"It would be a waste of money to opt-out of participating in a matching scheme."
Fully utilize the different facilities provided by your employer i.e. pension benefits, health benefits, retirement benefits, transfer benefits etc. Talking about pension and retirement benefits,These investments will continue to grow in value over the course of decades and will help you prepare for the future.
It is essential to maintain a healthy level of curiosity and availing these facilities regarding the benefits provided by the company. It can save a lot of hard earned money.
7. Audit Your Spending.
"Budget is not an instrument that imposes restrictions on your lifestyle"
Budgeting is a method for managing your finances more responsibly. Take a note for every spending can lead you to avoid excessive and unnecessary spending of money.
making every penny countable can control your spendings and will help you to know where the money is going at the end of the day.
8. Practise Frugality
Frugality is an important habit of growing money by the time. Try to stay below the means, being economical while buying things can save a lot of money.
It's not necessary to fall for new car or latest mobile phone Or laptop luxury brand of watch or clothing. An rich person buying the trending SUV car won’t feel much pinching in his pockets, but for normal person, it can hamper your process of being financial independent.
Buy only what you ‘need’, search and bargain for good deals are a few of the practices one could do to practice frugality.
9. Avoid Bad Debt
Now a days it's common to take loans in order to buy things, luxury items that are beyond one’s financial means.
If one won't stop and continue down this track, will one day have huge debt and will never become financially independent. Your first priority should be to clear all debt and loan for a happy and early retirement.
Try to avoid taking debts for unnecessary things just to show off in front of friends and society.
10. Work for Your Goals
"Without any direction, there is no way you could make it to your destination."
This thing also applies on your financial journey.
Create roadmap for your life goals and list everything that you want to achieve. This will enable you to monitor the progress being made and make necessary adjustments to redesign or reschedule the goals.
11. Achieve a Level of Financial Literacy.
One should keep educating himself about different financial instruments and broaden his horizons if he want to achieve wealth. Having a solid grasp of your investments can make you to make informed choices regarding your finances.
Knowledge about banking, equity, insurance, tax system, mutual funds can make you independent for investment decisions and also keep you ahead of many people who are struggling for making financial decisions.
12. Create Emergency Funds
It is a wise decision to create a cushion where you could fall. From a financial point of view, an emergency fund can act as cushion in case of any sudden windfall. Apart from regular investment methods, allot a small portion of your income for creating an emergency fund which can help you in times of any unforeseen situation. So that you not need to withdrawal your long term investments which were done with the intent of growing your money for future goals. You may keep this emergency fund in form of Fixed Deposits, liquid mutual funds or as cash in your bank account.
Final Words
Following these 12 habits can help you to grow your wealth over a period of time. Start learning about investing, be frugal, get some side hustle, and have an emergency fund to be financially stable and independent can ultimately make you grow rich and financially independent.
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