I would like to edit a question on the topic: How can I get rich on my own while I’m still young? You can get rich through inheritance. So I don’t consider hereditary wealth. How to create wealth yourself? It’s not easy. You have to really work hard. If luck promotes, you will get rich faster. Luckily, I mean favorable conditions.
The hard part: The rule of adding the growth rate and the starting point of your trajectory.
Zero never gives you growth. No matter what growth rate you apply, zero always remains zero. First, you need to enter the positive zone. The initial amount is the biggest impact on your wealth. So you need to earn this great starting amount as early as possible. For example, you invest $ 1 at a compound rate of 10%, in about 14 years it will be $ 4, at the end of 21.5 it will be $ 8. You will be rich by $ 8. At the same time, if your initial investment is $ 1,000,000, at the end of 21.5 years you will receive $ 8,000,000 at a 10% compound rate (800% of the initial investment). The focal point where your trajectory comes from is very important.
Wise investments will make you rich:
If you can get higher growth rates, you will get rich faster. In the previous example, we considered only 10% of complex growth. In fact, you can get a higher rate if you invest wisely. In my youth I invested in a mutual fund (tax scheme, 3-year lockout period) an amount of $ 5,000 to get tax breaks. After 3 years, the NAV was 500% of the original bid price. I got $ 25,000. If I had invested more in these investments, I would have been rich in 28. It was auspicious time in life. In life it is rare. You can get such favorable terms 3 or 4 times in a lifetime. 3 or 4, because in the past you missed some, and in the future – more. Defining such conditions is the key to wealth. In general, young people will miss the first chance or even more like me. You will quickly miss the odds if your mind is engaged in non-financial activities. Only experience will teach you.
Short-term investments will not make you richer:
Time is another important factor. Accumulation takes its time. Time and higher growth rates make up you. If you want to get rich in 7 years, then the growth rate should be much higher. If your goal is $ 1,000,000,000, and now you only have $ 100, then every year it has to grow 10 times to reach the goal. This is an extraordinary growth rate. So, becoming a billionaire with an investment of $ 100 is quite difficult. The probability is very, very low. Therefore, you should not set an unrealistic goal. Give yourself time to accumulate your wealth.
The people around you are another important factor:
99% of the people around you will make you spend money. My dad asked me for money to invest in a plantain crop. I gave him the money he asked for. 1 year later he told me that the whole crop of plantain was flattened by the monsoon wind. The profit he got was zero. My money also went to waste.
My uncle advised me to buy a car when I was 25 years old. I did not have enough money to buy a car. I had to borrow money. I would easily get a bank loan. Somehow I put off the idea of buying a car at the time, which was a really unwanted thing. This decision was good and made me richer.
One of my neighbors was willing to sell his house and offered me a price. I had no money at the time. I only had half the money. For the remaining amount I would get a bank loan. I somehow declined the offer. It was a very, very bad decision I made in my life. These investments would already bring me 100,000% profit. This is different favorable condition that I missed.
Don’t invest money in the stock market without learning the basics
I once bought 100 shares of a company (IT). Each stock cost me 1,200. Within 6 months the market price reached 3,600. I didn’t sell it thinking it was valuable. I decided to hold on for a long time. The following month he began to descend because of the wind. The entire stock market dived. My stock reached the bottom of the issued price of 40 or 45. I lost all my money. However, I did not sell it because there is nothing more to lose. I waited and patiently waited 7 years until the price rose to 85. During this period the company corrected and consolidated its market share. I bought more shares of the same company. Ten years later it is now trading at its previous peak.
The other stock I invested along with the aforementioned at about 45 years old didn’t rise even to 100 in the first 10 years. In the next 3 years it rose to 250. In the next 3 years it crossed 1000 and is now trading around 1500.
However, there are other stocks that have never been able to raise their head after the crash.
This is how stocks behave in the market. There are reasons why they behave this way. You have to learn the basics.
My advice is to live carefully. Explore the surroundings and look for favorable conditions. Invest time and money to improve yourself that will always help you. Enough of one favorable condition to make you rich. Be careful. Don’t miss out.