How to become rich by Investing Money

 

To become rich is everyone’s dream and people practice different ways to become so, but unfortunately everyone do not become rich due to various reasons.

Few people do not become rich due to lack of commitment and consistency though they might have chosen the right path. Always remember not everyone can become rich overnight, it takes time for an average person to become rich. If you will follow certain rules that are required for smart investing, you can definitely fulfill your dream of becoming rich. Though, there are no hard and fast rules when it comes to investing, it depends primarily on the investment pattern you chose and the risk appetite of an individual.

If you will invest some money consistently every month, you can easily build a huge corpus in the long term. Investing itself requires you to be consistent to make money in the long term. Try to invest each month instead of investing lump sum amount for better returns, especially when you are investing in market linked schemes. Apart from regular investing, you must diversify your investments across different investment instruments to beat inflation.

You must invest minimum of 10-15% of your monthly income to make money for your future. Always invest in percentage of your income as many people simply invest fixed amount each month for years despite their income increases every year. So, if you will invest in percentage, your investment amount will also increase each year without affecting your monthly expenses. If you can increase your investment percentage every year by just 1%, you can almost double your investment corpus in the long run. Let us see few ways of how an increase or decrease of mere 1% can make you rich.

Suppose, a person is investing 10% of his/her income every year for 20 years and the income increases by 10% each year in an investment instrument that provides 8.5% returns per annum; however, if he/she will keep increasing his/her investments by 1% every year for just 5 years and then maintains the 15% for rest 15 years, then the investment corpus will grow by more than 40% than if the person would have invested 10% for 20 years.

Example:

Income: $60,000
Savings (10%): $6,000
Maturity Amount after 20 years: $696,000

If a person increases 1% savings each year for 5 years, then
Maturity Amount after 20 years: $1,002,000 (A Millionaire)

Difference: $306,000

This is the money a person will make just by investing 1% extra every month for only 5 years.

Similarly, if you can reduce your monthly expenses by just 1% every year and invest it in any safe investment instrument, then again you can save a big enough amount after few years.

So, if you want to become rich, invest systematically and consistently to make a big corpus for your future. If you want a top-up on your corpus, simply invest a little bit higher each year and save little from your monthly expenses to build even a bigger and better corpus.

Related Link:

Tips to Invest Money - Investment Tips

Things to consider before buying a House for Investment - House Investment Tips

Things to consider before investing in stock market

 

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