What I have learned on how to create wealth by making savings (not a finance person, just speaking from experience and advise)
- Save 30-40% of your net income per month.
- Save at the start of month, not at the end. Keep that money separately.
- This saving should not be kept in a bank because currency will devalue. Would suggest to invest in mutual funds (easy to put, easy to withdraw) . Many funds don’t charge or charge less front load fee.
- Repeat this every month and you’ll end up creating a large pool of asset.
- You can utilize the same saving to buy assets that give you a return ( property on down payment, shares, crypto).
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A very pertinent question is: How do we save 40% of our monthly income with this inflation and expenses? In fact many end up in debt monthly on credit cards due to lack of disposable income.
1) Write down your monthly expenses and cut out on unnecessary ones. Only critical ones
2) Defer expenses that can be incurred later and are not needed urgently (eg. a large Tv, expensive car etc )
3) Focus on creating a side hustle which gives you income ( small store, kiosk, online product, return on saved money )
4) Work hard to get that promotion so your income increases. Or switch to a better pay .
Change lifestyle. Eat healthy, spend maturely. Ensure you have 2,3 assets that give you monthly or yearly return. This amount can be utilised later to multiply your assets and expenses
Unless you follow this, you’ll always be stuck in a debt spiral. Will earn and spend. Focus on building assets, not just expenses
Credits: UMER F.
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