8 Financial Strategies To Get Rich In 2017

By BankBazaar | January 27, 2017

8 Financial Strategies To Get Rich In 2017

People go to all sorts of lengths to accumulate wealth – subjecting themselves to extreme budgeting, working two or more jobs and even taking investment advice from silly ‘talking parrots’.

In this article we give you 8 tips from financial advisors on how to grow your wealth in 2017. After demonetisation, Trump and Brexit, it’s probably best to be prepared for choppy days ahead.

Before we begin, keep in mind that wealth takes time to multiply. Frequently breaking your investments is like making a rod for your own back. So be patient as you learn to master these eight strategies.

Additional Reading: 10 Things You Should Ask Your Investment Banker

Understand Equities: The very word strikes fear in the heart of many. Investing in Equities is not entirely risk-free, which is why many people don’t consider it a worthwhile Investment option. We understand you don’t want to lose your savings, but if you invest your money in equities there’s a good chance it will multiply faster than rabbits.

People who have invested in equities (stocks) have generally made more money than those who have stuck by traditional investment options like Fixed Deposits. As per historical data, returns from stock markets tend to beat inflation more often than not.

If you don’t want to trade in shares directly, you can invest your money in Equity Mutual Funds. They offer great returns and help you save tax. So, on one hand you make money from your investment, while on the other you save money due to tax concession.

Maximise Tax Savings: If you want to get rich then investing is only half the deal. The other half of the story is to maximise your tax savings. Do not underestimate the power of tax-saving investment options. They might not look like much at first glance, but they have great savings power.

A Public Provident Fund (PPF) is one such investment option. You get tax sops due to which your returns from this investment becomes double of what you would otherwise get from a taxable investment plan. Give it a shot and open a PPF account this year.

Step Out Of Your Comfort Zone: A few generations ago the investment scene wasn’t this dynamic. Back then people either invested in Fixed Deposits, Gold, Real Estate or simple savings schemes offered by post offices. Then came the stock markets. The risk takers invested in corporate bonds and stocks and got rich.

No matter how comfortable you are with age-old, trusted investment options, make sure you take some calculated risks this year. If a certain investment option befuddles you, read about it, talk to experts and only then invest in it. Taking calculated risks is the way forward.

Smarter Budgeting: You can only invest once you have savings. To accumulate a fair amount of savings you need to budget well. Cut down all unwanted expenses – binge drinking every weekend, impulsive shopping, ordering in food everyday – and you’ll see money accumulating in your bank account.

Experts say, you should ideally invest about 30 percent of your income. If you are unable to save that much then you need to draw your purse strings a little tighter. Spend only on the essentials and never spend more than what you need.

Contrary to popular belief, getting a Credit Card will help you budget better. Getting a Shopping and Cashback or a Rewards Credit Card will certainly help you meet your budgeting goals.

Additional Reading: Financial Planning Ideas To Make Your Money Grow

Don’t Chill With Your Money: You can relax once your money is safely invested. You certainly aren’t gaining much by keeping your money in a Savings Account or under your mattress. The idea is to make investments that offer returns above inflation levels.

You will clearly never reach this goal if you don’t invest your money. Don’t let weeks pass by before you start investing. Every day you delay should be seen as a potential loss.

Additional Reading: Value Investing

Be A Thoughtful Investor: Don’t plan your investment strategy based on the suggestions of your friends or relatives alone. First chart out your short and long-term goals. Then consider the various investment plans available to you and pick the ones that are aligned with your goals. For short-term goals you can invest in Debt Funds, Liquid Funds and Equity Linked Savings Schemes etc. Similarly, for long-term goals you can salt away your money in ULIP, Equity Funds or PPFs.

The story doesn’t end here. You need to keep reviewing your investments from time to time. If a certain investment is not giving you good returns, close it and transfer your funds to an investment performing well. While you need to show patience with investments, you must also be flexible to make changes when necessary.

Portfolio Creation: Earlier in the article we spoke about the importance of creating an investment portfolio. You need to allocate your funds across asset classes in such a manner that you are covered against the risk of losses and get maximum returns. This requires spreading out your funds in secure assets like FDs and risky ones like stocks. With high risk comes great returns.

Go The SIP Method: A Systematic Investment Plan is the best way to make your savings grow. In this method, you keep aside a certain sum of money from your salary every month to invest.

This is an excellent method to invest in a Mutual Fund. You can invest as little as Rs. 500 using the SIP method. SIP offers the power of compounding, giving your investment strategy additional strength.

Additional Reading: Mutual Funds – SIP It Down And Feel Good

If you’re looking to get rich, or at the very least grow your wealth in 2017, then these 8 tips should hold you in good stead.

Oh, and by the way, Loans too can help you save on tax. We have a host of Home Loan, Car Loan and Personal Loan options for you.

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Category: Financial Planning

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