How to get rich while still young
I’d like to edit the topic question: How can I get rich on my own while still young? One can also get rich through inheritance. Therefore, I am not considering inherited wealth. How do you create wealth on your own? Is not easy. You will have to work very hard. If luck favors him, he will soon be rich. Good luck, I mean favorable terms.
The hard part: The compound growth rate rule and the starting point of its trajectory.
Zero never gives you growth. Whatever growth rate you apply, zero will always be zero. First, you must enter the positive zone. The initial amount is the biggest impact on your wealth. Therefore, you must earn this initial large amount as soon as possible. For example, invest $ 1 at a compound rate of 10%, after about 14 years it will become $ 4, at the end of 21.5 years it will become $ 8. You will be rich for $ 8. At the same time, if your initial investment is $ 1,000,000, you will get $ 8,000,000 at the end of 21.5 years at a compound rate of 10% (800% of initial investment). The point of coordinates from where its trajectory develops is very important.
A smart investment will make you rich:
If you can get a higher growth rate, you will get rich sooner. In the example above, we consider only 10% compound growth. In fact, you can get a higher rate if you invest your money wisely. When I was young, I invested in a mutual fund (tax plan, 3-year lock-in period) an amount of $ 5000 to get a tax break. After 3 years, the NAV was 500% of the initial offer price. I got $ 25,000. If he had invested more in this investment, he would have been rich at 28. That was a favorable time in life. It is rare in life. You may get these kinds of favorable conditions 3-4 times in your life. 3 or 4, because you missed some in the past and you may lose some more in the future. Identifying such conditions is the key to getting rich. In general, young people will miss the first opportunity or even more like I missed it. You will miss out on early opportunities if your mind is engaged in non-financial activities. Only experience will teach you.
Short-term investments won’t make you richer:
Time is another important deciding factor. Accumulation takes its own time. Time and a higher compound growth rate will make you rich. If you want to be rich in 7 years, then the growth rate has to be much higher. If your goal is $ 1,000,000,000 and now you only have $ 100, then each year you have to grow 10 times to reach your goal. That is an extraordinary growth rate. So it is quite difficult to become a billionaire with a $ 100 investment. The probability is very, very low. Therefore, do not set an unrealistic goal. Allow time to accumulate your wealth.
The people around you are another important factor:
99% of the people around you will make you spend your money. My dad asked me for money to invest in banana crops. I gave him the money he asked for. After 1 year he told me that the entire banana crop was flattened by the monsoon wind. The return he obtained was zero. My money also went by the wind.
My uncle advised me to buy a car when I was 25 years old. He did not have enough money to buy a car. I had to borrow money. He could have gotten a bank loan easily. Somehow I put off the idea of buying a car at the time, which was actually somewhat unwanted. That decision was a good one and it made me richer now.
One of my neighbors was willing to sell his house and offered me a price. He had no money at the time. He only had half the money. He would have obtained a bank loan for the remaining amount. Somehow, I declined the offer. That was really a bad decision that I made in my life. That investment would have brought me a 100,000% profit by now. This is another favorable condition what did I miss.
Don’t invest in the stock market without learning the basics
I once bought 100 shares of a company (IT). Each share cost me 1,200. In 6 months, the market price reached 3,600. I didn’t sell it thinking it was a stock of value. I decided to hold out a lot. The following month, it started to go down due to a bit of headwind. The entire stock market was in a tailspin. My shares bottomed out at the issue price of 40 or 45. I lost all my money. However, I didn’t sell it because there was nothing to lose anymore. I waited and waited patiently for 7 years to see the price rise to 85. During this period, the company had been correcting and consolidating its market share. I bought more shares of the same company. After 10 years, it is now trading at its previous peak.
Another stock that I invested along with the ones mentioned above at around 45 hadn’t even risen to 100 in the initial 10-year period. In the next 3 years, it went up to 250. In the next 3 years, it crossed 1000 and is now trading around 1500.
However, there are other stocks that had never been able to raise their heads after the collapse.
This is how stocks behave in the market. There are reasons why they behave like this. You have to learn the basics.
My advice is to live consciously. Study your surroundings and look for favorable conditions. Invest time and money to improve yourself, which will always help you. A favorable condition is enough to make you rich. Consider. Do not miss it.
