Be cautious about spending money. Before spending money on large purchases, ask yourself:
- Will I still be satisfied if I spend less?
- Can I find a version of this product that costs less but is still good quality?
- Would I rather have a TV with all the latest technology or would I rather be wealthy?
- Would I rather buy a car that is so expensive that I have to stretch the payments out over five years or would I rather be wealthy?
- Would I rather take a Rs 25,000 vacation or would I rather be wealthy?
When people realize that they're making more money than they need to meet their expenses, they often decide to buy more luxurious cars or move up to a larger or nicer home. If they took the extra money and invested it instead, they could become wealthy.
So, here's the tried-and-true method of how to become a millionaire:
1. Have a written financial plan that includes your goals, your net worth, your debt-to-income ratio, your savings and investing plans, and your monthly budget.
2. Save money automatically by having at least 10% of your salary automatically deposited in your savings account each pay period.
3. Educate yourself about investing.
4. Live below your means. Remind yourself that he who hesitates when it comes to shopping often decides he doesn't need the item after all and doesn't want it as much as he thought he did.
5. Avoid using credit cards unless you can, and will, pay the balance off in two months.
6. If you have credit card debt, concentrate on paying it off as quickly as possible. The interest you're paying is money you could be saving.
7. Invest in mutual funds and have money deducted from your bank account automatically every month to invest in these funds.
8. If possible and feasible, own your own business.
Millionaires educate themselves about investing and seek professional advice, choose high-quality blue chip stocks or mutual funds with good long-term performance records, invest consistently, and hold onto these quality investments over a long period of time.
As you can see, this proven method of becoming a millionaire is not rocket science, and it really is attainable for many Indians.