The Most Authentic Guide on Personal Finance and Investments


Words of Wisdom : "Try to be a rainbow in someone's cloud." ~ Maya Angelou

A million dollars in your account? How to begin...

Millionaires don’t eat cakes!

Surprised? Intrigued? Curious?

Well, frankly speaking, millionaires do like cakes. However, there is a BIG difference between them and the non-millionaires (or rather, I guess 'millionaire-aspirants' would be a better term).

Focus! That's where the difference lies:

Millionaire-aspirants focus on eating. Millionaires on making cakes... eating will come in due course of time.

Millionaire-aspirants focus on spending. Millionaires on building wealth... spending will happen in due course of time.

Now just reverse this logic:

If you desire to become — and, more importantly, remain — a millionaire, you must first make cakes before you start eating them. You must first build wealth, before you think of spending it.

The fruits you have will soon be over, if the focus is primarily on eating. But, if you work towards growing a tree, you could enjoy the fruits endlessly.

That is why, all financial advisers will ask you to change your money formula:

From
Income - Expenses = Savings
To
Income - Savings = Expenses

There is no secret about the fact that you need three things to grow a tree.

1. Inputs such as seed, water, sunlight, manure, etc.
You may be the best gardener in the world. But you won’t grow a good tree, if you don’t have the good inputs.

2. Gardening Skills
Alternatively, even the best of the farms and seeds will not give you a tree, if you don’t have the right gardening skills.

3. Time, Discipline and Patience
Most importantly, both the best inputs and the best skills, won’t grow your tree instantly. You have to give appropriate time, take regular care and be patient.

The same goes with becoming a millionaire too:

You need three things to turn yourself into a millionaire.

1. Start-up Money
You may be the best financial expert on earth. But without any money, you may not be able to create money.

2. Financial Skills
Then again, earning millions may momentarily make you a millionaire. But it will all wither away, if you don’t have the right financial knowledge to keep the money growing (or at least not depreciating).

3. Time, Discipline and Patience
Last but not the least, you have to give time to your investments to grow. Unlike instant noodles or instant coffee, there are no "instant" investments.

how-to-be-a-millionaire
If you are in such a hurry, it's going to be difficult becoming a millionaire.

History is witness to the fact that many of you have the start-up money. Yet only a few among you possess the 
(a) right knowledge and 
(b) right temperament 
to make it to the most coveted ‘millionaire-club’... and maintain it.

As I have repeatedly stated, handling financial affairs is no rocket science.

A. Don’t get disturbed by all the jargon thrown at you. They are meant to confuse, perplex and disconcert you. If the sellers of financial products and their agents start communicating in simple language, they will probably be out of business in no time. Their levels of profits are directly proportional to your levels of ignorance.

B. Dump all heavy-duty calculations, charts and graphs into the dust-bin. It's all absolute junk. None of it is necessary. In most cases, a few simple numbers such as
- IRR (Internal Rate of Return),
- CAGR (Compounded Annual Growth Rate)
- YTM (Yield to Maturity) and
- EMI (Equated Monthly Installment
will adequately serve the purpose. You don't have to be a mathematical genius to manage your money smartly.

In short, it all boils down to plain and simple common sense... and loads of commitment... to materialize the multi-millionaire in you.

And this where most people fail:

There is simply no lack of resources (including many free ones like this blog), to pick up most of the relevant lessons on how to efficiently and effectively manage your personal finances. Moreover, Internet has brought vast amount of knowledge and wisdom, into your hands.

Therefore, the only reason why you may still be a financial illiterate, is your lack of interest and commitment.

Of course, these resources shouldn't be confused with travelling in a plane... where you just buy the ticket and relax, while an experienced pilot takes you to your destination. And that’s not all! During the trip, pretty faces serve you nice things to eat and the in-flight movies keep you entertained.

Rather, all this knowledge and wisdom is analogous to a map. It will guide you to achieve your goals. But "you" have to undertake the journey. No one else can do it for you. Remember, unless you go to the gym and work hard, you cannot enjoy six pack abs or a size zero body. No one else can exercise for you.

[Here's some really good news: Mutual funds are almost like an airplane journey... where professional and experienced fund managers help you to reach your financial goals with minimal efforts. Your work is limited to choosing the most appropriate funds and sticking to your SIPs for long (long) term.]

Naturally, if you have to reach your destination, you have to start your journey... sooner than later. The learning, therefore, has to be supplemented with regular practice. Begin as soon as you can. Start with minor money matters and smaller amounts. Once you get a hang of it, you will gain in confidence to handle bigger issues and larger sums of money. Your financial destiny is in your hands.

So what are you waiting for? Get up; get going; and get you act right.

As someone has very rightly said, "It may not always be easy... but I can promise you, it will always be worth it".

I would love to see you all become REAL millionaires, and not just remain millionaire-aspirants.

My Best Wishes.

In case you missed, here's my Numerology for best investments with maximum returns.

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Ignorance is like a SIGNED BLANK CHEQUE... anyone can MISUSE it.

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