CREATING WEALTH ISN'T DIFFICULT

Our wants are endless. These wants are beyond our means. It could be anything from owning a house, to driving a car, to your childs education, to enjoying an exotic vacation. Ironically the fulfillment of one want is, often, only the beginning of another. For most of us the best way to satisfy our want is by putting aside a part of our earning on a regular basis. But thjis is easier said than done. Fulfilling wants through savings require syou to be regular, systematic and most of all disciplined. Unfortunately our ever increasing needs and expenses scarcely allow that. The need is, therefore, to devise plan to get more out of your savings.

WHAT ARE SAVINGS?
Traditionally a saving is what we retain from our incomeafter all the expenditure have been taken care of. Simply put INCOME-EXPENSES=SAVINGS.

But typically this is what really happens: Say Mr. Kumar has a monthly income of Rs.10000 and targets to save Rs.2000 every month. He get his salary on the 1st of every month. In the first month he is very careful, and makes usre that his expenses are limited to Rs.8000 as planned. On the 27th his friend call him out for a drink. Mr. Kumar agrees, but decides to limit his expense to Rs.500 owing to cover the short fall thje coming month by saving Rs. 2500. The next month a similar story repeats itself. And the month after is no exception either. Suddenly Mr. Kumar's savings are lagging behind by a good Rs.1500. finally Mr. Kumar reaches a point where he has to start all over again. Sounds familiar?

IS THERE A SMARTER WAY TO SAVE?
Sure there is ; and it is very simple to add. It is only a matter of rearranging your priorities; putting "savings" on the top of the list. All you have to do is save before you start spending. The equation would be quite like: INCOME- SAVINGS=EXPENSES.

And how does one manage that? Well if you were to save at the beginning of the month, then what remains is there for you to spend, and not the other way round. That for you is the smarter way to save. Having said that let us understand the few rules of the game:

Rule I: BE A DISCIPLINED INVESTOR
Discipline is the key to becoming a successful investor; in this context means being regular and systematic. The difference between a sporadic investor & a regular investor is very clear in a course of time: a disciplined investor will almost always be in a better financial shape and will be able to generate much better returns out of his investment within the same time frame.

Rule II: INVEST IN INSTRUMENTS THAT BEAT INFLATION
Traditional investment avenues like saving accounts, bank and company fixed deposits, small saving schemes, gold, real estate etc, in time, undoubtedly provide steady returns. But, these avenues discount one very important aspect that, more often than not, eats into your investment without you noticing it even inflation is arguably the most neglected factor when it come to investments. Most of the traditional avenues deliver lower returns than the prevailing rate of inflation, making it an investment that doesn't do enough to counter the adverse effects of it.

Rule III: INVEST THE SAVINGS AS EARLY AS POSSIBLE
Some feel that it si important to have a substantial saving to invest , and have the tendency to waitfor their savings to accumulate before they begin the process. This is a misconception. In fact this delays often lead to lost opportunities. The best way to optimize your returns is to identify an investments where you an invest even small amounts. And, over the period of time gain considerably more than you would stand to otherwise.