I’ll contribute 15% of my net income towards retirement savings. Please note that we cannot divert all savings to retirement account only. For salaried people, their retirement savings is going to be their contribution to EPF. For other people, PPF or NPS can be a good alternative. The point is, if one wants to become rich, it cannot be accomplished by skipping steps number eight and nine. In fact, all preceding steps shown in the infographics does an effort to enable one’s ability to execute step #8 and #9.
I’ve written a detailed article on theconcept of passive income. If you like to know more about it, please check the link. The above three steps will build a foundation. The next leap will be into the real world of investments – buying assets. This is where our efforts will make us stand out from the crowd. Henceforth, whatever will be done, only a handful of people do it.
We will discuss all steps of the process indicated in the above flow chart. But I would first like to highlight two essential preconditions of becoming rich. I’m talking about the steps indicated in #8 and #9. Rich people are willing to learn from other people without looking at others’ education, age etc . Most people quit because of fear, doubt and worry. Rich people act in spite of FEAR, doubt and worry. People with big cars or house are certainly not necessarily rich.
Use your budget to set limits for yourself, and then stick to those limits. For example, the recommended amount to spend on housing is 25% of your income. Or, you might choose to set your housing budget at 15% so you’ll save more. You could buy generic at the grocery store in order to cut back on food costs. If an application isn’t your thing, you can do it the old-school way on paper or a spreadsheet. It doesn’t really matter, as long as you make sure every single dollar of your income has a job to do. Honestly speaking, at first glance I did not like it but gradually it started to make sense, now I am loving it.
Once a good stock is purchased, stick with it till it becomes a multi-bagger. Generally, for me, a 2X or 3X multiple is enough. I sell those holdings and use the sale proceeds to “buy assets” that generate quality passive income.
As you can see, Brian was also willing to pay a bigger price than John. Brian is one of the most successful businessmen I know. He has an international manufacturing firm with more than a thousand employees. I guess that Brian is worth about 50 million dollars—if not more. He has a mansion, fancy cars, vacation homes abroad, and many investments in other business and real estate. “For nearly 20 years, I gave that company my all. I got a good offer and I sold. ” That’s when he became rich, in his forties.
Not only do you need a source of income, but having a second income is a great idea as well. I don’t mean that you have to have an additional part-time job, but find a way to make a couple of extra bucks on the weekends or a few nights during the week. This could be anything from freelance work to selling homemade goods on Etsy. Making an extra hundred bucks every month could have a huge impact on your millionaire journey. It may not seem like a lot, but it can really add up every year. It’s all about finding creative ways to save instead of spending all your money just because you can.
When problem comes many people will be discourage and let the problem happens without resolving it. When Michael Jordan was asked how he became the worlds greatest basketball player, he replied, ‘I expect more from myself than anyone would ever expect from me! When my coach expects me to train 3 times per week, I would train 5 times. When my coach expects me to score 15 points for each game, I would score 36 points! If that were true, all the mathematicians in the world would be rich. But what strikes me the most is that gettingveryrich requires something different.