As so many people reading The Psychology of Money these days, I thought I will share what I have done since the years. I am neither a financial advisor nor our goals and ways can be same. But I believe general values remain same

1. I have always lived well below my means. When I migrated here and had a meagre salary, never asked for money from my family which was well to do.We don’t pull out of wealth to live. Remember if u buy iPhone 12 pro you may look rich but u will be less wealthy by 1.3 Lacs.

2. I am averse to debt. Except for taking loan for buying one house to live I keep debt away. That also was repaid as fast as possible. No loan for more real estate investment or personal expenses or holidays.

3. I have inherited a strong habit of savings from my family. Our savings rate is very high. At times frugal living. Not that we don’t love or buy nice stuff or live comfortably. I have been saving from my first salary certain percentage and living life with rest.

4. I try to balance my portfolio. Have always done myself but last few years fund managers do it. Though I feel I can do a better job then them many times. I don’t think most portfolio managers even invest in their own schemes. I divide my portfolio in this way

1. 30% is on businesses I run
2. 15% is on fixed income low interest zero risk
3. 15% is in stocks and MF
4. 15% in FA to earn rental
5. 10% in Bullions
6. 15% liquid and cash.
Diversified portfolio helps me balance ups and down.

As I said earlier we save a lot because we don’t spend on things we find useless. It’s just our way. My wife has never purchased a Re jewellery in 30 years of marriage, we don’t stay in expensive hotels during holidays. We prefer to spend on experiences.

All my savings have been long term. I don’t think I have ever encashed any of my savings to meet expenses. Health cost for every one is covered with large insurances. Not being forced to sell investments means the compounding of savings works for longer period of time.

The best way to create wealth is to let money compound. You will fail 9/10 times trying to earn fast money or copying someone else. You can afford to not become the greatest investor but can’t afford to be a bad one. Everyone will have their own goals and ways

But basic values will not change - high savings rate, patience, low debt, a safety fund for unwanted emergencies, and living for self. Spending money to show people how much money u have is fastest way to lose money. Understand difference between Rich and Wealth.