3 Simple Steps to Become Rich

Here r the 3 basic steps of Wealth Building.
Hope u will like it..
Follow these simple steps for building a Wealth. No Complex theories or Investment Strategies required...
these steps follow KISS formula.... well it means.... "KEEP IT SIMPLE STUPID".....!!!!!
HAHAHAH..... just kidding.....

1. Pay Off all the Debt and Stay away from New Debt -

this is the first important step in starting a wealth building. u have to first pay off all the debts before starting a serious wealth building, (All means all Except Home Loan), Credit Card Debt is the worst one. so first of all payy off all the credit card bills. after that comes other loans like Car loans, vehical loans, personal loans, shopping EMIs or any other kind of debts. Paying off debt is an Investment. no need to pay off whole the home loan before starting wealth building. ...y? that we will discuss in some other article. so first pay off all of your debts. No matter how many years it will take... but this is important. may b it will take 3 years or 5 years or may b more.... but don't worry..... paying off all the debt is necessary and proven very effective scientifically and mathematically..... Don't think that my Car loan is due for next 3 years and it will give me a Tax benefits for Debt.... if u can pay off your Car loan within a year don't wait for 3 years u fool...!!!

Stop Borrowing Money NOW.....!!!! yeh.... this is very true... take a Scissor and cut down all of your credit cards. Don't pamper yourself by saying that Credit card is for emergency purpose. i will use it in Emergency.... For an Emergency u should have an Emergency Fund and not a Credit Card..... v will come to it later..... Replace your credit card with the debit card first. don't take any other loans. if buying a car is your necessity than also don't take loans but instead buy a 2-5 years old second hand car... but in no way.... borrow the new money.....!!!!!

2. Build an Emergency Fund before doing Investment -

After paying all of your debt.... the second step is to build an Emergency Fund. Emergency fund MUST have Minimun 3 to 6 months of your monthly expense. so in case of your disability or Hospitalisation until you claim your medical insurance policy.... your family's day to day expense meet... if your monthly expense is Rs. 1 lac than your emergency fund must have atleast 3 to 6 lacs before u start investing..

Remember, Emergency Fund is for Emergency....... u want to arrange a drinks party for your birthday and u dont have a single rupee in your pocket..... this is not an Emergency....!!!! Understand?....

3. Invest For Long Term ( means more than 10 years ) -

Once u pay off all your debts (Step 1) and build an Emergency Fund (Step 2) than and only do this step.... Don't try to b oversmart.... Don't jump directly to this step.... otherwise what will happen?... u have to liquidate your investments in emergency to pay off your debts and for day to day expenses...

Start Investing in Well-diversified, Equity Mutual Funds with past record of atleast 5 years via SIP. Don't see market ups and downs daily. u will gain nothing except stress. Park your money here for long-term means for 10-15 years or may b even more.... Equity has given highest return over every other Asset Class in the long-run in last centuary. so it is better that u invest your money in equity funds if u don't need it for atleast next 5 years.....

if u have invested Rs. 2 lac Lump-sum in equity before 20 years than in last 20 years Indian stock market has given more than 20% compounded annual return. so today its value was more than Rs. 75 Lacs. this is the power of Equity and power of compounding.... so Invest for long term...