5 Ways You Can Grow Rich with Less Income

22-June-2021 |

Becoming wealthy and leading a comfortable life is the dream of many. But it might be difficult for some to achieve. The major reason for this being low income. Debt burden and less income will force people to sacrifice their dreams. There are ways to change this. One can still lead a comfortable life with a small bank balance by keeping in mind the following steps.

 

The five steps mentioned below have to be followed regularly and consistently to become wealthy with less income.

 

  1. Proper investment strategy: Unless you have an inheritance, you cannot get rich without investing your money. For money to grow, you have to park it someplace where you can get decent returns. Savings accounts are not investments as most of them offer only 3.0%-3.5% interest annually. There are much better options where you can get higher returns. Sometimes, with the correct strategy, you can get up to 10 times the amount invested.


      Of course, to enjoy the benefits of compounding, you have to start early. But you should remember that it is never too late to start. A proper investment strategy includes putting aside money every month to be invested in equities, bonds, mutual funds or other market instruments. You should also ensure the diversification of your portfolio. Never put all your eggs in one basket. This will ensure that even in bleak market conditions, you will get reasonable returns.


  2. Insurance schemes: To invest money, you first have to safeguard your money. This can be done through a ULIP plan. In case of unfortunate event of death, such insurance policies will save the day. The claim payout from the insurance companies could compensate for the decrease in monthly income.


      You will not have to worry about the financial needs of your family. This policy acts as a fund that protects you and your loved one. This gives you a chance to take other prudent investment decisions. ULIP investment takes care of the investment and insurance aspect from your side.


  3. Safe investment avenues: Most of you might get influenced to take part in getting rich through get rich quick schemes. This can be detrimental to your financial health as well as your mental health. You cannot become rich fast through these schemes. Their only purpose is to lure you into risky schemes .You might also be encouraged to rope in other people from your friend circle and families to put their money in such potentially fraudulent practices.


    It is thus advisable to invest in reliable avenues monitored by the government and are approved by the regulatory authorities. For risk-averse individuals who also want to generate wealth, ULIP investments are best suited. They generate decent returns while protecting the life of the insured.

     

  4. Expense management: You might be spending on things that you do not need. With less income, you are advised against spending on unnecessary things. You will have to cut down on your spending habits to start saving more money to invest. You will have to make some significant lifestyle changes to make this work.


    1. You simply cannot give in to temptations and will have to control your impulsive spending habits. We are not advising you to renounce all the materialistic pleasures of life. These are only suggestions so that you can enjoy a much higher lifestyle once you are wealthy.

  5.  

  6. Less debt:


    1. Most people get into significant debt to buy things that are not affordable. Then you end up spending a significant part of your life trying to repay the loans. Debt payments and interest payments also take a chunk of your finances. Instead, this debt could have been invested in other places to generate money for you.

    2. In no way does this indicate that debt is dangerous. It only becomes dangerous when it is mismanaged. Proper debt management thorough financial planning can ensure a comfortable life.

  7.  

    ULIP policy to build wealth.  

     

    Unit Linked Insurance Policy or ULIP policy is a multi-benefit insurance plan. The premium that is paid towards this policy is divided into two parts. One part is used to provide coverage while the other part is invested in equity markets. This insurance policy also provides various tax* benefits under Section 80C and Section 10(10D) of the Income Tax Act, subject to prevailing tax norms.

     

    TATA AIA Life Insurance has a claim settlement ratio of 99.06% for FY-19-20, zero ULIP charges for fund switching, choice of 7 unique fund options, option for self-managed and expert-managed portfolios and much more, Tata AIA Life ULIPs are a viable insurance-cum-investment avenue for wealth generation.

     

    Conclusion
     

    In the beginning, you have to work for money. But later on, you should automate most of your investments and premium payments to ensure that your money works for you. You will have to follow the above five steps with discipline to achieve financial freedom. These steps could prove to be the mantra to become rich. It might be difficult at first, but it is not impossible.

     

    Tata AIA Life Insurance offers a variety of ULIP policies to chooses from. Head over to Tata AIA Life Insurance ULIP policies to know more.


    L&C/Advt/2021/Jun/0960

     

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