How financial habits can improve your wealth | The Financial Express

How financial habits can improve your wealth

More you curtail your unnecessary spendings, the higher will be your savings and investments and greater will be your wealth creation.

How financial habits can improve your wealth
Investment is not about accumulation of huge money to start with.

Investment is not about accumulation of huge money to start with. You may invest even as low as Rs 500 on a regular basis. However, the more you save, the more you may invest to create more money.

So, to start building wealth, you need to save money by spending within your earning limits. To curtail your spendings to save money, you need to have good financial habits or inculcate them.

“Habits greatly influence us, and this rule applies to our financial wealth as well. It is often said that even if a fortune is given to someone not financially disciplined, they could lose it all while a knowledgeable disciplined person would grow the wealth multiple times with only a small amount of money. Financial habits augment the outcomes of such smart work efforts,” said Saurav Ghosh, Co-founder, Jiraaf.

One of the ways to manage your money is by noting down all your expenditures, so that you may go through it and detect the unnecessary ones and make efforts to minimise such spendings. More you curtail your unnecessary spendings, the higher will be your savings and investments and greater will be your wealth creation.

Another way may be chalking out a financial plan and determining how much you need to save to achieve your financial goals and make efforts to achieve the target.

“For instance, people tend to save whatever is left after spending on their needs. On the other hand, smart people decide how much is logical to save every month and spend the rest on their needs,” said Ghosh.

“The greatest investor of all times (arguably), Warren Buffet is an example of financial discipline, and so is Azim Premji, the founder of Wipro. They have both displayed great financial habits despite being multi-billionaires,” he added.

“To invest and optimise the money one has, combined with a disciplined habitual approach is key to building future wealth,” Ghosh further said.

Saving is important to start your investment journey, but not enough to create wealth. You need to start investing early and select the right investment ways through proper diversification to reach your financial goals on time.

“The age-old concept of never keeping all apples in one basket is the greatest financial advice that one can get. Any investor aiming to build a fortune has to incrementally invest in different avenues,” said Ghosh.

“Why should one have to choose only gold or real estate or stocks/mutual funds or alternatives? Why not all of them in proportions that suit one’s objectives? These are the kind of financial habits that will improve your wealth generation capabilities. After all, habits make us who we are,” he added.

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