You might have gotten interested after seeing the thumbnail and would be thinking about the same boring pointers like don't eat out, buy cheap clothes, basically don't enjoy life and then you will make smart financial plans and your future will be secured
A wealthy life is the one where you live a decent life with wealth also being created Namaskar friends, I am Pranjal Kamra and you are watching Groww First let us understand, what you don't necessarily need to do? As I said earlier, you need not sacrifice a lot like eating less from out, stop drinking Starbucks Like people go on a diet, and are mostly unsuccessful as it goes on a long time and people question is it really worth it?
Similarly, you need not sacrifice a lot, because you can create wealth by investing small too if you use it intelligently. Many people want to earn a lot and save a lot too And if you can do that, well enough but realistically we don't have this magic where we watch a video and generate wealth If all of this existed, we wouldn't have needed financial planning
You can generate wealth by just tweaking a little of your current lifestyle. For example, we often hear about these Bollywood celebrities or cricketers driving a taxi to earn and 10 years ago they were Crorepatis This implies that they did earn a lot but didn't plan it.
Whereas on the other hand, there is a middle-class couple working and they make a bungalow after some years and we think that they might be doing something suspicious, but this can also be that they planned well So from this, it is clear that you need to plan well and can have a better future Now let us know the pointers, before which we need to understand our expenses
that are of 4 types The first are the necessities, food, ration, insurance that cannot have a significant cut The second is future planning, to buy a car or home, marriage or childer's education or retirement planning Here also you cannot cut much, but yea can a buy a cheaper car keeping all other the same So first necessity and the other future planning where you cannot cut much
The third is enjoyment expenses, like going to a movie, Starbucks, expensive clthes or shoes List down all these things and prioritize the ones that give you the most happiness So with the help of the list you will be able to gauge what can I make do without Now the fourth category where we spend alot, which is neither necessity nor future and we are spending and not getting any happiness in return Like having an expensive pizza, not liking it where we end up spending a lot without any returns
So these are the unwanted expenses which you have to trim down to 0 and you are actually spending 10-20% on this category from your monthly income So when you list down your expenses mostly of the 3rd or 4th category, and you reduce them, you will automatically be left with more
So just by classifying and listing down, you can save 1000 bucks on the spot We all know that the amount we save have to be invested in stocks, mutual funds, gold and the power of compounding will work, we know these basics, but we have a problem That investing huge amounts won't make you wealthy,
you need to keep a check that you don't face negative compounding Rs.100 invested may compound to 105 if not 100 but shouldn't go to 80 Because for example, you buy a wrong investment expecting a 10% return and it dips to 80 In this case you are now 2 years behind, because it will take 2 years to get back at 100
So you have to keep in mind that your capital is protected, as Warren Buffett says the first rule of investing, don't lose money And we normally get fiesty and invest in higher-risk instruments as we have less amount to invest and whenever we take more risk, that risk will catch up and we might end up losing that small amount too
and since we have that small amount we should be more cautious and not take excessive risk The expenses that don't give you happiness and saving them can be invested in stocks mutual funds or gold And please do not take excessive risk, as many people lose out on money due to negative compounding And if you keep investing those 1000 every month for 25-30 years,
you will accumulate a lot Your career and your business will grow and hence your investments will too You will achieve your goal when you have discipline, controlling risk, and removing unwanted expenses This is Pranjal Kamra signing off. Bye
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