What do all the rich have in common (besides money)? Since the pandemic hit in March 2020, there has been a huge increase in Google search volume for stocks, mutual funds, investments, etc. in India and other countries.
The pandemic has broken the monotony of life for most of the people. Many people have realized the value of savings and money.
Yes – a lot of it is because of the need to save. Many new investors see wealth creation outside jobs and careers as possible. But let’s take a step back and think about why wealth creation is important.
Inflation, over 10-15 years – can make you quite poor, especially if your money is stuck in a bank account.
For example – a savings bank account will give you 2-3% return after tax, but if inflation is 6% – you are becoming 3% poorer every passing year.
If you watch your spending – they have become more and more international. We buy clothes from foreign brands, go to foreign universities to study, and travel abroad more than a decade ago.
Unfortunately, our rupee has depreciated 3-4% every year in the last 20 years. The cost of education in the US has increased 2.5 times over the past 15 years.
Apart from inflation- a weak rupee also destroys your spending power.
So let’s get back to the original question: what do wealthy people have in common other than money.
The answer is ownership!
Every rich person is rich because he has something or the other. Whether it is their own business or other business through private investments, mutual funds, stocks, gold, real estate and other assets. Some of the wealthiest employees use employee stock ownership plans (ESOPs) to eventually become wealthy. Until now in history, ownership has been the only way to financial freedom.
Salary elevates lifestyle – not money. So those who are dependent on higher salaries should revisit if this is the right strategy. Financial stability comes from a job, but financial freedom comes from ownership.
If one’s goal in life is financial independence – they should have ownership as a top priority in life.
How does one start?
Most people spend first and invest what is left. The right way is to invest first and spend later. This ensures discipline and focus.
When investing, it makes sense to diversify into mutual funds (equity, debt) and different asset classes such as real estate and gold. It protects investments in the event of an asset class underperforming.
As a rule, the more you touch your portfolio – the worse it performs. So stay invested in the good times and the bad (and no one can predict the bad times).
Starting early is important. This is probably the most important step. Start as soon as possible – The sooner you start, the more time you will give to compound your assets.
Finally – the only common characteristic of the wealthy is ownership. So make sure you start your journey towards ownership.
Ownership will help you become rich and protect you from inflation (silent killer).
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