We all have been listening a word “RICH PEOPLE” since childhood. What do you mean by being rich? Being rich means owning a car, a luxurious house, bank balance, etc.

When I asked this question to many people around me, I got mixed answers like,

“I will be rich, when I start earning Rs. 10 lakh per month.”

“I will be rich, when I leave rented house and buy my own house.”

“I will be rich when I can afford luxurious holiday.”

“I will be rich when I earn a full room of money.”

There are few people who think other way also. Like,

“I will be rich when I have a peaceful life where I don’t need to worry about anything.”

“I will be rich when I don’t have to do any work by my hand and I have staff to do it.”

I will be rich when I have freedom of going anywhere anytime.

So, everyone has different opinion. Everyone has different goals, needs in life. Someone may become happy with Rs 50,000 salary and someone may not be happy getting salary of Rs 5,00,000 also. As everyone has different lifestyle, thought process, needs and greed.

There are again few people who think that they will be rich if they live a peaceful life where they live simple lifestyle and where they don’t run behind money full time. But that case is possible if you are alone. If you have people dependent on you like parents, spouse, children then you have to earn to take care of their needs, to settle children, to educate children, to take care of parents health, etc.

When you are a college going boy earning Rs 5000 doing part time job. At the age of 40, you may start earning Rs. 50,000 but you still feel you were happy with income of Rs 5000 in college days as you didn’t have to pay for grocery, college fees, electricity bill. You just spent that money for your hobbies or enjoyment with friends. But at the age of 40, you have spouse, house, car, children to take care of. So, you find Rs 50,000 less.

So, if we want a lifestyle where we want our children to get educated from the best university and go for higher studies, we want to go on holiday twice a year, we want to buy a car, we want to dine out once a week, we need money for that. We can say, money ONLY doesn’t define richness but it decides the lifestyle of yours and your family’s. If you have someone in family who is earning well and you don’t need to earn to bear your expenses then that’s a different case.

We need to have goals and passion to fulfil the goals. We need to work hard to earn money and then we need to take wise decision for spending and investing that money. You need to plan properly your earning, how much to spend, how much to save.

If you save Rs. 5000 a month then after 10 years you will have 5000 * 120 = Rs 6,00,000 with you. But if you invest this money, you will be able to see this number bigger after 10 years. Like, if you invest this 5000 in monthly SIP of mutual fund, you may be able to make it around Rs. 11,00,000 after 10 years. So, by investing your money at right place, you grow your money. Its like “money making money“.

Rich people believe “I create my life.” Poor people believe “Life happens to me.”

-T Harv Eker

What do rich people do different from ordinary people? Rich people earn more money because they do hard work to earn money and they take smart decision to grow that earned money. So, they have few money habits so they can grow their money more and more.

Also Read:

• How to Conduct a Financial Check-up?
• 9 Tips How to Manage Your Finances in a Systemic Way

Money Habits of Rich People:

1. Rich people avoid debt: If you have debt means, you have to pay interest. So, rich people avoid paying interest. If you want to get yourself out of debt then stop getting into another debt trap.
2. Stick to a budget: Having lot of money doesn’t mean you will keep buying everything. Rich people have budget for all spending. They have huge amount so we can see them spending more than us. But still, they don’t spend more than their earning. They believe in saving more so they can invest that further.
3. Rich people invest: Rich people know that money makes money. They invest money to grow their finance. They also keep emergency fund aside but they keep their money in some investment plan and earn healthy profit and reinvest that profit too.
4. Rich people don’t spend to look rich: You should understand the difference between want and a need. Just because your friend stays in big house and you buy a big house wont take you toward becoming rich as buying a big house would make you go towards debt and then again you wont be able to save or invest to grow your money as you will be paying interest from your earnings. Create a corpus from your savings over a period of time so you can buy your dream house.
5. Rich people research the market: Rich people do not follow blind advice from friends, relatives or any stranger. They do research before taking any decision. They have multiple investment options available but they seek a good advice from expert, they understand the risk, people with whom they will be doing business, return, etc. They do research and then they take decision.
6. Rich people don’t retire: If you see, rich people work after their 60s. They don’t retire completely. Its not that they need to work but they like to work.
7. Rich people read a lot: Rich people read a lot. They read as they want to improve themselves. Now question is what do rich people read. They don’t read for entertainment. They read newsletters to be aware of market. They keep themselves updated.
8. Rich people create multiple income streams: Rich people know the faster way to make money and that is by making multiple income streams. They invest their money in some investment plan or business and they earn more profit out of that. So, money is always coming in from all the businesses or investments.
9. Rich people always try to think differently: Rich people became rich by thinking differently and taking action towards it. Just thinking doesn’t take you to goal. You have to work hard towards it. Rich people try to think about new business ideas and they are positive about their business plans. They know how to make a small idea profitable.
10. Rich people seek advice from expert: They know the importance of wealth so before taking risk they seek advice from expert. Like, if a rich person wants to invest his money into share market, he will see the advice from expertise who is into share market since many years.

Also Read: Where to invest for regular monthly or yearly income?

Bottom Line:

Invest money wisely. Create multiple income streams. Avoid taking debt or have a repayment plan in place for debt to be cleared in stipulated time. Consult your financial advisor and seek his advice for financial goals of life. Life is a learning process and there is no age for learning. Do not put all your investment in one basket and create multiple avenues for income as many investments are cyclical in nature. Cultivate the habit of being a patient investor and a great learner. Be patient and disciplined with your investments and richness will follow you.