These Money Rules Will Make You Rich
Hi everyone, today I am going to present some of the money-related rules that can make you rich.
10 Money Rules
1. The money doubling rule
This rule says how much time it takes for your money to get double. One of the ways is to divide the rate of return you are getting on your investment by 72. For example, if the return on investment is 6% per annum then the money will double in 12 years (72/6). This is generally the case with fixed deposits where on average you will get 6% interest each year. Now assume that you are investing in mutual funds where the average rate of return is 12%, although it can be higher. Your money will double in 6 years (72/12).
2. Avoid crabs
Crabs have one of the characteristics and that is they bring others down and will not let others succeed. The same is applicable to our lives as well. If someone says that you have changed, you have become very different, you should enjoy yourself with your friends, you should travel, you are earning good money so you should spend on luxury items, etc, then you should strictly avoid such people because they try to brainwash you and won’t let you succeed in the long run. These people will also taunt you if you talk about an investment or financial planning. You should keep yourself away from these people.
3. Don’t show off
The general tendency of the people is to show of their lifestyle, which includes their net worth, luxury purchases, family vacations, achieving a fitness goal, accomplishing a target at their job, etc, on social media. In short, people post each and every minute success of their life on the social media. Your followers or friends might appreciate it in public but deep inside their hearts they feel jealous. Through the fake appreciation of your friends, you feel that you have become more successful. To maintain that fake appreciated lifestyle status, you will end up spending money on unnecessary things. You must develop your own definition of success, not defined by others.
4. The 1 million rule
This is the value-serving way through which you can serve people to create money instead of serving yourself. Consider an example of creating a YouTube video where you provide knowledge in the area of your specialization which can be helpful to millions of people. Similarly, you can write a blog or create a course that is not very costly or easily available and valuable for the audience. In short, providing something that people want or ask for, not something that you want to give them.
5. All popular things are wrong
Let us understand this concept through an example. You must have received an SMS or message on social media regarding stock recommendations. These messages must have been circulated to millions of people just like you. If millions of people follow that advice, then no one will earn money out of it. This is one of the principles of finance which says that if you operate with information that everybody else has, then you are going to earn the same returns. So, the rule says don’t follow the popular advice.
6. Get some help from experts
If you are not an expert in managing your money, then you should ask for help from an expert. One of the perfect ways is investing your money in mutual funds which are managed by an expert fund manager. These fund managers have good knowledge about the stock market and how various stocks are expected to perform in the future. They know when to enter the trade and when to leave. The profit earned will be provided in the form of an appreciated NAV value, which increases the worth of your mutual fund investment. In return, you have to pay a minimal amount in the form of an expense ratio to the fund manager.
7. The 5% rule
This rule says “Do what you are good at”. You must have heard about the Pareto principle, which means by doing 20% of the things you will observe an impact of 80%. But with money, the rule is 5%. It says that with 5% of the things you will get an impact of 95%. For the majority of us writing on this platform, our 5% will be content writing so that the maximum knowledge can be shared with the readers. You need to identify your 5% which means the area you are excellent at. Once you identify your 5%, you will automatically be motivated to do it.
8. Focus is the new IQ
Nowadays, everyone is distracted from their track. The thing that gives them happiness is not generally followed by the majority of the US. We need to create a discipline which will eventually result in the formation of a habit and once the habit is formed then we will be able to focus more. The same is applicable to money, you just need to develop a habit of investing regularly in mutual funds or equity, as per your knowledge.
9. Knowledge is Power
This rule says the knowledge to know who you are? What is your relationship with money? What type of nature do you have towards the money? The objective is you should not get enslaved by the money but rather enjoy working for it. Your relationship with money must be defined and you should feel satisfied about it. If you try to do anything opposite the relationship you have with the money then you will always be going to make the mistakes.
10. Narrow down to explode
You must hold on to one thing and follow it passionately. This can be possible if you explore things. For example, you cannot predict in your early 20s, what you are going to become for the rest of your life. The things that make you happy or the things you want to do. By the time you reach your 30s, you should become so efficient that, you need not run after money rather money should run after you. In short, you should focus on fulfilling your passion.
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Disclaimer: You must invest after considering your risk-taking capacity. The above information is not any recommendation or suggestion. It is only for an educational purpose. You must seek the advice of a professional financial advisor before making any investment.
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