Who does not want to become wealthy? Everyone wants to be millionaires or billionaires, and those who already are want to grow their wealth. If followed, these top 17 Financial tips for young adults will make you rich in no time.
Many want quick wealth-creation investments that build wealth. Some want to invest for the long term, and some for the short term.
Some are willing to take risks, while others want to play safe.
Few are happy with traditional products (like post office savings, and Govt. Bonds) while others are ready to take mild to moderate risk and ready to invest in mutual funds, hedge funds, alternative investments etc.
Table of Contents
Can Becoming Wealthy Be a Goal–Wealthy Vs. Rich
Usually, the terms, being wealthy and rich are used interchangeably. Both are different financial conditions.
What are the differences between the rich and the wealthy?
People might be rich, but they still have to work compulsorily to maintain their lifestyles and money.
| Wealthy | Rich |
| Live a simple good life | Live a lavish Lifestyle |
| Spends on needs to enjoy a good lifestyle | Depends on paychecks to paychecks to maintain their lifestyles |
| Put their money to work | Compulsory work for money |
| Money lasts their lifetime | Do not have money for lifetime |
But actually, what is the meaning of being Wealthy?
It is essential to understand how much you require so to live a peaceful happy life.
There is no limit to human greed.
Some might consider having 1 crore as being wealthy, while others might think 2/3/5/10/20/50/100… or more crores is required to be wealthy.
Most people don’t have goal clarity. Wanting 5/10/20/100/1000 crore is a DESIRE and not a GOAL.
We tend to think of such numbers when we do not have clarity on what amount will be sufficient. So the best way to know how much will be sufficient is FINANCIAL PLANNING.
The wealth creation journey starts from the day, we take and work on careful strategy. Wealth can never be created with random plans ( investments). Random investments do fetch returns, but the Scale can’t be great.
What is meant by Wealth Creation?
Wealth Creation means to build wealth using financial products. To do this we just need to invest in financial products and start the wealth creation journey.
Top 17 Financial tips for young adults
Although there are many financial tips for young adults but we are enlisting best personal finance tips for wealth creation.
1. Planning & Vision
We all invest money. But have you noticed, how many of us create wealth. The percentile is quite low. Do you know why?
This might be because of lack of planning and vision. Therefore, for wealth creation planning and long- term vision is necessary.
2. Establish/ define Clear SMART Goals
Defining SMART financial goals are an essential part of the wealth creation journey. Let us understand with an example.
If you want to reach the BestInvestIndia office, obviously you should know the proper address to reach the office.
Again you need to choose the right vehicle to reach office based on your distance.
Similarly, if you want to fulfil your future financial requirements, you need to know your goals. Their future price tag and what amount you need to invest to pay. And of course, the investment option you need to choose to fulfill that goal.
Example: Bestii wants his daughter to go to a premier college in India. Now suppose today’s college fee is Rs. 10 lac a year. The four-year degree will cost him approximately 45 lac including miscellaneous expenses.
Thus he needs to plan to invest in some inflation-beating product for such an event.
Why Should You Opt For Goal Based Investment Planning?
3. Make a Budget & Start Investing
Budgeting not only helps you understand your expenses better but it also helps you understand your cash flow and ways to save more. It helps you to plan strategically. Saving consistently in a savings account won’t help much in the long run. Thus only investing in the right instrument will help.
4. Mindful Spending
No matter how much you earn, if you don’t opt for mindful spending, then you will continue to live paycheck to paycheck. Ultimately low savings. Here, rule 50:30:20 can help to save better.
5. Start Investing Early
Can’t invest big money. No worries! Instead, start saving early. Why?
In the compounding formula what is in exponential format? You guess it right. It is the time. No matter how small you can save time can multiply your money.
6. Focus on Tax Saving
Invest money in tax-efficient instruments and save taxes. There are better tax-saving strategies such as tax harvesting.
Thus, only tax deduction is not a single thing. There are other ways to save money.
Tax Harvesting – Reduce Taxes The Smart Way
Top 7 Tax Saving Investments Under 80C
Top 10 Tax Saving ELSS Mutual Funds 2024 -Invest To Be Wealthy
Reach out to us, for better tax savings from your investments.
7. Invest lumpsum money whenever possible
Investing a small amount helps you to build wealth over time. But lumpsum money investment magic can’t be ignored.
Whenever you have a lumpsum investible surplus. Just add it to your kitty. It will surprise you later.
How To Invest Lump Sum Amount In Mutual Funds?
8. Diversified Your Portfolio
Diversification can easily distribute investments across different asset classes. A well-diversified portfolio is less susceptible to the risks associated with individual securities. It takes calculated risks and helps you reduce risk ( portfolio concentration risk).
9. Be Debt Free
Paying your high-interest debts is essential. Since one has to pay a high interest for the loans. Financial Planning includes Debt reduction planning too. This can help you pay your loan faster.
10.Patience and Discipline
Wealth creation is not a one day game. But essentially it is a long-term journey that demands patience and discipline.
11. Make Financial Plan
You will get multiple guides online on where to invest money to get maximum benefit.
But where not to invest is crucial to know and understand. A Financial plan helps you know where not to invest your money.
It analyses your current Financial situation and help you build wealth in long run.
Top 10 Easy Financial Planning Rules For Beginners
Why Personal Financial Planning Is Essential?
12. Revise Financial Plan Often
Making and implementing a Financial Plan is not sufficient. You need to revise the plan at least once a year or whenever there is a change in family, goals or other aspects.
13. Prepare Yourself for Contingency
Planning for contingencies is as vital as investing. Since in case of any contingency one is forced to withdraw from their savings and thus lose money due to penalties, low returns etc.
14. Buy Insurance Cover for Safety
Life is uncertain and that is the only reason we need to buy safety covers in the form of health insurance, life insurance, accidental insurance and critical insurance cover.
What Is Term Insurance-Advantages & Details
LIC Term Insurance Plans- The Ultimate Buying Guide
A Comprehensive Guide To SBI’s Term Insurance Plan
15. Educate Yourself
Education and knowledge can save us from many unnoticeable aspects, new opportunities etc.
16. Stay Away from quick rich plans/ Ponzi schemes
Avoid Ponzi schemes which promise quick money, and are scams. They’re illegal, risky, and collapse eventually. They’re unfair and can ruin your hard-earned money. Stick to legitimate investments after doing thorough research.
17. Get Help If You Need It
We Indians are born savers and we love to do our R&D and invest our money. But professional help saves you from those costly mistakes, that one might make in the investment journey.
A Financial Planner can help you to do this.
Top 6 Roles Of Financial Planner In Your Life
Conclusion
Wealth creation is a long-term journey. Financial planning offers goal clarity, the right and best investment choice with the right investment amount. It also helps you judge the goal’s duration and the kind of investments you should choose.
These personal finance tips for young adults will help you save and invest better.
As you begin your wealth-building journey, keep in mind that the best advocates you can have are persistence, patience, and a positive mental attitude.
Please share your views about these top 17 financial tips for young adults. Feel free to share other financial tips as well. If you like the post please consider sharing it with others too.
