15 Money Lessons That We Should Learn From Rich To Have A Healthy Financial Float.
Ah, money, moolah, paisa! The stuff that makes the world go round, or, at least, makes our round trips to the grocery store a bit more exciting.
Managing money is a skill. My bank job witnessed people becoming hand-to-mouth even after earning a 6 Figure income. There are instances of luck or lottery-favoured rags to riches people’s stories reversed, back to the square.
Ever wonder how the Ambanis or the Tatas of the world handle their wealth? How Anil Ambani and Donald Trump types still live in a life of opulence even after filing for bankruptcy?
After all, Rich must be doing something right to stay afloat always, right?
Unfortunately, the middle-class approach to money often leaves us entrapped in modern financial snares. It’s time to take a peek into how we can go from being a regular Karan-Arjun family to living the ‘Kabhi Khushi Kabhie Gham’ (Ultra Rich) lifestyle!
1. Diversification: The Biryani Principle :
Imagine a financial portfolio as a plate of hot and spicy biryani. Just as biryani is a mix of rice, chicken (or paneer for our vegetarian friends), and a combination of spices, so should be your investment portfolio. It’s like making a perfect biryani, where fixed deposits are the rice — safe but plain on its own. To make it exciting, you need the masala of stocks, the succulent chicken of real estate, and the exotic aroma of bonds and startups. That’s the kind of biryani the Ambanis and Tatas eat!
2. Smart Debt: No Chole Bhature on Credit, Please!
Here’s the thing — not all debt is evil. The trick is in understanding the difference between ‘smart’ and ‘dumb’ debt. Borrowing money to buy the latest iPhone or to throw a grand Diwali bash? That’s as silly as buying chole bhature on credit and getting a tummy ache (and debt) later. But taking a loan to invest in a promising business? Now that’s smart debt. Use the debt for setting up Paani Puri shop– it keeps giving back!
3. The Magic of Compound Interest: The Sooner, The Better
The magic of compound interest is like the tangy and flavoursome pickle your grandmother makes. The longer it’s left to mature, the more delicious it becomes. It’s the same with your investments, the earlier you start, the more time your money has to grow, just like grandma’s achaar!
4. Ownership vs. Consumption: More Mango Trees, Fewer Mango Shakes
While most of us salivate over the latest gadget or fashion trend like a mango shake, the wealthy focus on owning assets (mango trees!). The difference? The shake is delicious but short-lived, while the tree keeps producing mangoes year after year. So instead of splurging on the latest iPhone (hello, mango shake), why not invest in a promising stock (ahoy, mango tree)?
5. Financial Education: Ignoring the ‘Sharmaji ka beta’ Syndrome
The wealthy don’t take financial tips from ‘Sharmaji ka beta’; they’re always learning, always expanding their knowledge base about global markets, tax laws, and emerging opportunities. Trust me, your neighbour earning a million on some stock,15% interest on a cooperative bank’s FD or barren Land 50 Km from your place becoming 3 times of value in 6 months is not right always. Dint focus on the news instead learn to analyse.
6. Delayed Gratification: Turning Down Gulab Jamun Today for an Ice Cream Sundae Tomorrow
Who doesn’t like immediate pleasures (looking at you, gulab jamun sweet)? But the wealthy often choose to skip the gulab jamun today to enjoy a bigger ice cream sundae tomorrow. They know that by saving more now, they can enjoy a more luxurious lifestyle later.
7. Long-Term Perspective: It’s a Saas-Bahu Saga, Not a 20/20 Cricket Match
Wealth creation is a long saga, not an overnight blitz. It’s more like a Saas-Bahu soap opera, demanding time, patience, and resilience. It’s not a quick, flashy 20/20 cricket match; the wealthy understand the importance of strategic decisions and long-term financial planning.
8. Risk-Reward Equation: The Dharmendra-Hema Malini of Finance
Managing risks in investments is much like performing a daring Bollywood stunt. High risk can yield high rewards, but it’s a double-edged sword. Just as Dharmendra can’t perform his daring stunts without understanding the risks, you can’t leap into high-risk investments without proper knowledge. Fixed deposits are the reliable Nirupa Roys, while cryptocurrencies are the exciting Shah Rukh Khans of the investment world. Understand your risk appetite to invest in FDs or highly volatile Cryptos.
9. Rent Before Owning: The Thakur’s Mantra
Like Thakur in Sholay, who managed to fight villains without hands, the wealthy often prefer to rent before owning assets. This allows them to redirect resources into profitable ventures, much like Thakur focusing his resources on catching the elusive Gabbar. Think before pouring all your past and future savings into owning that big house or that fancy BMW instead of renting it and enjoying the same benefit.
10. Protecting the Downside: Bajirao’s Shield
Wealth protection is like Bajirao’s trusty dhal (shield) making decisions that guard against the risk of losing your wealth. Aspiring traders dreaming of hitting Amitabh Bachchan levels of success must remember that protecting the downside, through diversification and careful planning, is key to long-term wealth. We all know 99% of traders lose their money in the stock market.
11. Insurance: Amar Akbar Anthony of Personal Finance
It is quite unfortunate still people treat insurance as a saving tax instrument or investment tool for wealth appreciation whereas the whole purpose of insurance is to cover the risk. Without knowledge, people pay lacs of premiums for minimum coverage. Insurance isn’t the superstar of your financial movie, it’s the supporting cast, like Amar, Akbar, and Anthony, ready to protect you when trouble arises. It’s meant to safeguard, not to become star in your investment portfolio.
12. Real Assets, Not Props
Ever heard of a rich person investing in REITs or Sovereign Gold Bonds? Probably not. They usually invest in physical assets like Physical gold, Land or Crypto which are scarce in nature and useful in hedging against risk. The point here is, when you invest in real assets, you gain control, which you don’t get with paper assets. So, like the rich, aim to own real assets.
13. Be a Mogambo: Keep an Eye on Your Money
Wealthy individuals know exactly where their money is going. They understand their investments down to the last detail. They take the help of professionals. However, new investors often entrust their money to automated investing apps without fully understanding the commissions and fees involved. So, always keep track of your money!
14. Business Loans Over Consumer Loans: The Gabbar’s Move
Taking a page from Gabbar’s book, the wealthy understand that being focused on the right things is crucial. It’s simple — they understand the concept of limited liability. They separate their personal wealth from their business’s finances. They prefer business loans over personal ones, thereby separating personal wealth from business finances, This approach protects their personal assets in case of a business downturn. a bit like Gabbar always protecting his personal territory.
15. Startup craze: Not a Karan Johar Movie
While investing in startups might seem as glamorous as a Karan Johar movie, without a deep understanding, it can be as bewildering as finding a plot in a Salman Khan film. There are so many new age apps alluring to invest Rs 5000 and become an angel investor, God knows when you get your money back. So, invest wisely!
In Summary
Building wealth isn’t about flaunting the latest Gucci bag or cruising in a shiny Mercedes Benz. I am not denying the fact of aspirations and experiences as per your age, but it’s about making judicious financial decisions that withstand the test of time. You don’t need an Ambani’s fortune to start, just patience, discipline, and the wisdom to invest smartly. So, embark on your ‘paisa-yatra’ money journey step by step, and remember, ‘paisa paisa karti hai’, but you should do it wisely!
