Money matters Part 1: Make your money work for you

A journey towards financial freedom starts with consistent and responsible investment strategy. This post is not about NOT spending, rather its about what to do with the money laying idle in your bank account.

Keys to building wealth

My financial philosophy is an amalgamation of the points listed below. However, this list is in no way exhaustive or static.

• Consistency: Power of compounding in not just a buzz word, its a skill and a discipline that has the potential to build you generational wealth
• Risk appetite: Know your comfort with potential losses so that you do not make hasty decisions during bear markets or emergencies. Do not invest in high-risk assets if you cannot bear short-term or medium-term losses and vice-versa
• Recognising ones goals: Helps decide the investment instruments to choose and the investment horizon as well. Retirement goal: Greater investments in non-market linked instruments (bonds, gold, pension schemes), this does not mean zero investments in market linked instruments, a good example is the NPS (National Pension Scheme)
• Monitoring ones portfolio: Keep track of ones investment and savings portfolio, you should know what your money is doing when you're asleep
• Diversification: Right allocation in different investment & savings instruments. Be willing to try something new and in the process learn it as well
• Understand taxes: Realising profit through various forms on investments/trading might be great, but you ought to understand the taxation on those investments as well in order to be a more disciplined investor
• Multiple streams of income: This will give you access to a wealth of knowledge and diversify your income sources. Income from multiple sources, such as, hospitality, technology, farming, construction, allows you to withstand seasonal and sectoral imbalances without compromising on your goals towards lifestyle or investments. (Eg: Hospitality industry during Covid-19 pandemic)
• DYOFR: There are many financial gurus on YouTube, Instagram, Facebook, TikTok and the likes, kindly Do your own f***ing research before investment your hard earned money. Know the risks, taxes, investment horizon, early exit penalties, etc always
• Outsource: Know what your hourly rate/worth is, eg: ₹1k / hr. Outsource every piece of work that is outsource-able, either because it costs lower than your hourly rate or because you need to focus on something that can provide you more value
• (Most important tip) Focus on improving your earning potential. Investing 10% of your ₹10L income is better than 100% of ₹1L income. Therefore, with all the investments that you do to make your money grow, most of that investment should be on yourself. UPSKILL UPSKILL UPSKILL!