Who doesn’t dream of being rich and living a lavish life? All of us aspire to have a beautiful house, the latest car, travel the world and have a good bank account that lets us live life to the max. There are some who are born into a rich family, while others become rich by their own efforts.
Naturally, becoming a millionaire is no ordinary deal. It requires you to save money and invest your accumulations in a professional manner instead of splurging on unnecessary things. Normally, as the income increases, people become spendthrifts. They intend to gather all sorts of comforts which may not be worthy enough to be procured; but, that’s not the way a person wanting to retire rich thinks. The very first thought that strikes one who is inclined to retire rich is how he/she can invest the surplus in the best manner in order to maximize its yield and have a comfortable retired life. There are some traits and qualities that the rich ones follow.
Here are some qualities of wealthy people:
Big Dreamers :- Rich people are big dreamers. They plan how to achieve their dreams and stick to that throughout all adversities. One can see qualities of perseverance, self-control, indulgence and decisiveness in their behaviour that convert their dreams into reality. They develop plans and implement pre-determined efforts to achieve their goal. They never rest, and they never quit. No one can become rich overnight; it is the outcome of constant effort and persistence.
Prudent Budgeting :- Budgeting is an essential step when you plan to grow financially and have a safe and comfortable later life. It involves deciding wisely about which expenses forms necessity and which are unnecessary. In order to gain financial independence after you retire, you need to avoid or cut down unnecessary expenses right from the time you decide to become rich while you are working. Otherwise, you will end up spending on unwanted extravaganzas, thus, ruining your own dream of retiring rich.
Asset Allocation :- To earn good returns, you have to hunt for good channels of investment which will provide ample opportunities to multiply your capital. Some of the most preferred channels are investments in mutual funds, stock market, and real estate, but you must also have the guts to bear the risk associated with the channel you select. Asset allocation approach can help you imbibe portfolio designing and in creating an extraordinary mix of investments to serve your purpose.
Investments Tracking :- Once you plan to get wealthy, it becomes a full-time affair to track where your money is invested and how it is performing. You need to have control over your portfolio and nurture the same with best-timed decisions. A smart investor maintains a diversified portfolio of investments and keeps a close eye on the performance of each and every avenue in which he/she has invested. Just like a good parent, never leave your child (investments) idle. Always have a nanny to take care of your portfolio in your absence.
Power of Compounding :- A similar trait among the rich is a passion for exploiting the power of compounding. When people invest their money for growth, they opt for compounding interest. This category of return on investment pays you the return along with the repayment of principal sum at the end of the investment horizon, thus, offering you higher returns than any other coupon bearing scheme. Investments under compounding method grow faster than any other method. But compounding can show its true colours in the long-term; you cannot expect an investment under compounding scheme of interest to give you good returns in short-term, the more amount and horizon you allow your investment, the more it will grow.
Reduced Debts :- Debts are the worst possible claims that can make your vision of becoming wealthy, gloomy. You have to eliminate any possible occurrence of such actionable claims by paying them off in priority. You will never want to build an empire in co-ownership. Hence, strive to clear your dues at the very first instance.
Periodical Assessment :- It is very important to assess the performance of your portfolio periodically so as to understand your progress in achieving your desired goals. As the route to success of such a kind is very difficult, you must set short-term goals and plan further upon accomplishment of the previous one. Thus, assessment is indispensable to determine what to do next. A professional can help you guide on the right path.
Indifferent towards Risk :- Retiring rich is a very risky affair. This is neither discouragement nor a threat, but, you may arrive at a point where you have to take prompt decisions on your own; hence you must have the guts to tolerate the risk that may occur as an outcome of your decision. Besides this, you also have to be patient with the market in which you have invested your capital for growth.
The deal becomes riskier when you opt to invest in the stock market. The stock market is the most volatile among other investment avenues. No one can accurately predict the trends in the stock market. The prices of the securities traded in the market are sensitive to economical factors such as political, fiscal or geographical. Some securities fall victim to these factors and some gain benefit. But a rich person never loses his courage and always finds a way to cope with adversities.
A wealthy person always seeks opportunities to take advantage of. You should have a similar perception if you want to retire rich. Remember that the challenge continues even after becoming rich as you have to maintain your status and continue growing. There’s a simple rule to follow: Think rich to retire rich.
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