You may not believe this, but being a millionaire is easier than you think. Investing smartly and having the discipline not to raid your piggy bank could help you turn this dream into reality.Invest a penny a day and you are sure to make a million after few decades. But are you ready for such a long wait? Gear up to go from rags to riches and erect your financial fortress. So, enhance your earning, cut back on your expenses and perk up your cash flow!
“If you want to become a millionaire faster, invest more money or find ways to make your money grow at higher rates of return,” says a chartered accountant.
There are other tips to help you become a million-dollar babe:
* Reduce your expenditure, save more and then invest!
* Decide the amount you will need at retirement and calculate how much you need to invest monthly now to get there. Deciding how to allocate your investment goals and on your appetite to take risk. The higher the risk, the greater the returns. On the one hand, taking too much risk may make you a millionaire, on the other hand, it may wipe out all your savings. So you have to be very careful about investing.
* Minimize the risk by diversifying the portfolio. Spread your money across many different kinds of investments, such as stocks, bonds, and short-term investments.
* Diversified portfolios tend to provide less volatile returns over the long term and can help minimize downside risk. So, never invest your hand earned money into one sector. Remember, diversification is the key.
* Mutual funds can give you the advantage of the funds’ diversified portfolios and professional management. However, investing in just one mutual fund may not be enough. You may want to combine several different funds that complement each other. Balanced or growth-and-income mutual funds should be considered. Such funds typically consist of dividend-paying stocks and high-quality bonds.
* In addition to balancing your overall portfolio, it is very important to diversify within each investment asset class. In the case of fixed income, bond funds or money market funds, for short term needs, invest in multiple individual securities that can provide asset class diversification.
By diversifying within an asset class, you can mitigate your risk and in this case you are less likely to be affected by the performance of any single investment.
The Right Plunge
Add those extra zeros pay cheque by venturing out and scrutinizing the market’s potential. Keep track of market movements and shift to other securities of a sector which is performing well or better at that moment. So, has the time for you to take a financial risk come?
- Once you know the business inside out, no one can over take you for a side.
- Before taking any decision to move out of the existing set-up to do something new, ask yourself what the earning potential of this new opportunity is, what the risks involved are and how long it will take to reach that level. Make a complete evaluation of all existing opportunities and check whether there is a long term potential in the opportunity or not.
- Scrutinize the market and check what sells.
Braveheart
In any short of moneymaker effort, whether it is starting a business or buying shares, there is a firm relationship between risk and reward. Most would-be millionaires take substantial risks in their pursuit of wealth – and the risks pay off. But, if you are a little reluctant about taking too much risk, invest in provident funds, pension funds and national saving certificates. These will give you returns as well as manage the risk factor.
- No pain. No gain. Successful people in this world have taken a risk at some point in their career; it’s essential. However, the risk does not always have to be a ‘do or die’ scenario. What you have to remember is you win some, you lose some.
- Make it a point to scrutinize the market before taking the plunge.
- Take good risks when you are sure of quality and when you have already experimented in a small way.
Surf Well
Grab every opportunity to position yourself as an expert and establish your credibility by considering others’ expertise. Learn to put up with competition in the market.
- Never miss an opportunity to invest, however small it may seem – you never know what can grow.
- Look at opportunities to invest in land in areas that are currently not so developed, but with potential. Real estate prices tend to rise quite high once development begins and these can provide very good results.
- Encourage questions from your clients. They could be a great opportunity for you to explore what they want from you. The prospective customers take time to ask questions when they have a high level of interest in your product or service. Make yourself more visible in the market by taking part in exhibitions which will give your business more exposure and create awareness through talk shows.
Smart Deal
Invest your money the right way. Pay yourself first by saving and renew your bank deposits frequently. If in a business, learn to source money and keep tracing the reliable networks. If you want to become a millionaire faster, then invest more money or find ways to make money grow at higher rates of return.
- High-risk investments can bring quick gains, but can also wipe you out. There should be a balance of safe investments with guaranteed returns for the short and long term. Some can also be allocated to higher risk for faster gains.
- Define your objectives clearly, based on your financial needs. Spread your risk across different avenues of investment like property, insurance, stock market, mutual funds, deposits, etc. maintain a good balance between investments that give high returns and those that are very safe.
- Investment in property is useful because it’s a permanent asset. Property rates are always rising. Investing in property could help you maximize your income tax returns.
Penny ’wise’
In the mystifying lingo of millionaires don’t forget to cut your costs to improve your cash flow. Making a million is not like a child’s dreams of flying. So apart from being pragmatic and hard working with an enterprising spirit, also learn to draw your purse strings tight.
- Lop off credit card usage and telephone bills and avoid fines on delayed payments of various bills”
- Maintaining a budget plan of your expenses ensures you spend less than your earnings. Prioritizing your major purchases also helps.”
- Avoid frivolous stocking up of material. Sometimes it becomes outdated or gets damaged due to unforeseen circumstances.”
