When there are those who find it extremely difficult to have comfortable living even if the monthly income is above average there are others who have a huge sum in their account with a lower income. This may look incredible, but it is possible with a wise financial management.
How much ever a person restricts himself from spending for purchases of products which are not in the “necessities” list, he finds is quite difficult to make both ends meet, if he belongs to the category of people with average income. This leads to more and more debts and it becomes rather difficult to become financially independent, leave alone becoming wealthy.
But, still it is possible to accumulate wealth with the meager income. Wealth is achieved by those who are willing to reduce their expenses. For this, one must first realize that income is not wealth.
The wealth of an individual is calculated by subtracting the inevitable expenses from the income he gets. Whatever a person has in his account after spending for the necessary purchases, can be considered as the resource for building his wealth. On the other hand, if a person is not concerned about his savings and goes to spend the amount left after fulfilling the basics, his wealth creating potential is lost.
Your income can be converted to wealth if you intend to use your savings for investment rather than spending for unnecessary expenses. The balance money in your account at the end of the month should be transferred to a non accessible account.
Reducing the mandatory and optional expenses every month will help you save more money which could be added to the amount in the non accessible account.
The monthly expenses, leisure activities and vacations are generally covered by the income of a person. The income for an employee is only till he is employed. If there is no pension scheme, it should be ensured by an individual to have adequate funds to be financially independent even after quitting his job or after retirement. The first goal is to be financially independent and one can take the lead from there to become wealthy.
If a person has no plans for retirement life, he is left with too little and so has to be calculative in his expenses. Whereas if a person invests a potential portion of his income when in employment or in business, there is always a possibility to become wealthy. It is possible with wise investment in GICs or term deposits.
The amount received on maturity can be reinvested or can be invested in mutual funds or promising stocks or bonds. The interest rates vary for each of these investments and the risks involved are of different types. The investments should be in appropriate proportions so that a balanced investment is ensured for avoiding loss.
The investment strategy should be such that you get the needed returns for your expenses apart from growing the capital which ultimately makes you wealthy. Just the income is not wealth and if one needs to become wealthy, he should ensure the growth of his investments.
Guidance from financial expert could help in deciding the programs to consider for investment that could convert your income in to wealth.
We aim towards helping our visitors to attain financial independence in life. Everybody wants financial freedom and the whole world seems to be running in the same direction. However, the quest for the monetary gains have reached to the levels that most of us are living live from paychecks to paychecks with almost 70% of our paychecks already destined to pay for something or the other which we have already bought in advance. In such a scenario thinking and visualizing a scenario where we have complete financial independence gives a lot of relief.