Hello, everyone today I am going teach you how to become rich as early as possible in your life. There is no magic formula. Everybody wants to be filthy rich in their life, but nobody seems to know how? What is the way? Some would say work hard, other would say work smart! But what exactly should be done! So before moving forward I would like to give you a brief introduction about “Investment”.
A common person does his/her savings from the monthly income but never invest and sometimes they would end up with an excuse that they are unable to save as their expenses increased. The common formula of savings, we all know:
- (Income- Expenses)= Savings/Investment
But after reading this articles one should try to apply this in a different way:
- (Income- Savings/Investment) = Expenses
So, I would suggest try this from now. A common man could see the difference instantaneously in their life & are able to save more than previous and can see how they have also cut down their expenses. So how is saving money is different from investing money, and how it is important in our life. “One of the main reasons investing money is important is that it helps to create more money, as opposed to just saving money in a bank account”.
Now that everyone have understood what is investment, let me speak about how investing from an early stage will help to create wealth more and more than ever before. Hence I would give some reason how early investment can help:
- Time allows you to take risk: Typically, when it comes to investing, ventures that are more volatile yield the highest return on investment. Investors, who have the time to recover if something were to go wrong, have the opportunity to make riskier moves. Those who begin to invest late in life are often inherently more cautious with how they invest their money.
- Compound interest will make the difference: Essentially, compound interest is the interest earned on interest. By continuously reinvesting your earnings, you are exponentially increasing your return on investment, continuously reinvesting your earnings, you are exponentially increasing your return on investment. Let us understand the power of compounding with a simple example:
See the difference both are of same age, one started early and the other delayed. Ram who started investing early has a retirement value of 9cr and Sham who started investing at his later stage has a retirement value of 2.5cr. This the power of compounding.
- Your spending habits will improve: Investing early allows you to develop disciplined spending habits by focusing on your budget and cutting expenses when needed. The goal here is to earn money by saving money.
- Be a step ahead: Compared to your counterparts, who may have chosen to invest later in life, over time you will be able to afford things that others can’t.
- Your quality of life will improve: Early investment will reduce the risk that you’ll be forced to make reckless choices to secure a stable retirement.
Hence start investing early to get retirement benefits early.