The total Indian millennial population caps at 440 million. Did you know this number is 1.3 times the entire population of the USA?! However, these sprightly and somewhat unique youngsters are poor savers. They spend more on their lifestyle and grooming, and ultimately, save less than 10% of their income.

These poor planning and saving habits aren’t limited to millennials. 60%+ Indian people do not have a retirement account and 70%+ are living from paycheck to paycheck.

It is a no-brainer that habits like these aren’t going to build long-term, sustainable wealth. Millennials especially are focused on accumulating things that lead to short-term happiness and not long-term satisfaction. These include clothes, travel, jewelry, watches, and phones.

However, if you dear reader, are the exception- if you want to build wealth for the long term, retire with a sense of safety, and maybe even retire early...then strap on your seat belts! It’s time for a lesson in true wealth.

Habits that create long-term wealth

The truth of the matter is: wealth isn’t built in one day when your salary is in crores or you win the lottery one day. Wealth is created over months and years with consistent actions that both save and create money. Most schools don’t teach this kind of financial education despite the fact that money is one of the most crucial tools for survival. The result is a lifetime of dissatisfaction, fear, bad decisions, and regrets.

If you have been plagued by the same in the past, then it all changes now. With the following 5 simple money habits, you will be well on your way to creating sustainable wealth for the long-term.

Learn, learn, learn

The world’s richest men share one important habit: they read and they learn. Bill Gates reads 50 books a year and Warren Buffet spends 80% of his office time reading.

Pick this first habit from them and begin actively learning. Since you are looking to create long-term wealth, books on cultivating a money mindset would be great. Books related to investments, stocks, bonds, real estate, etc. will also do good. Follow this up with tracking news related to the same for some real-world, hands-on learning.

You can begin with these tomes:

1. The Richest Man in Babylon by George S. Clason
2. One up on Wall Street by Peter Lynch
3. I Will Teach You To Be Rich by Ramit Sethi
4. The Automatic Millionaire by David Bach
5. Secrets of the Millionaire Mind by T. Harv Eker

Set goals

Once you start absorbing all this financial wisdom, bring it to your life. Begin by setting some goals. After all, if you don’t have a target, why will you think of sticking to habits that support reaching the target? So, sit down with a pen and paper (or with your laptop) and really think about your financial goals.

What is your money situation like after 5, 7, 10, 12, 15, 20 years? How much have you saved at each mark? How much have you invested? Have you bought a car or a house by then? What about your debts and loans? Are they cleared?

Don’t trip yourself up by wondering whether your goals are realistic or not. Be bold, be audacious. Dare to imagine wealth for yourself in order to actually create it. Once you’ve set your goals, it’s time to...

Eliminate non-essentials

Our economy of instant gratification lures us into making purchases that aren’t essential. Just because something can be bought, doesn’t mean you have to. With your goals in sight, evaluate your income, your spendings, and your savings. How much money are you spending frivolously?

The rich appear to be spending money on a lot of classy things, but in reality, they are highly discerning. They don’t spend cash just for the sake and the momentary thrill of it. They have their wealth goals constantly in mind and each purchase is aligned with hitting that goal as early as possible.

When you are about to make the next purchase, ask yourself if it’s truly essential. Pick a financial role model and aks yourself: would XYZ do this if s/he was in my shoes? If not, then you can also pass up on the opportunity.

Keep a check on your lifestyle

If one is not careful, they can easily fall in the trap of ‘lifestyle creep.’

Lifestyle creep is the phenomena when one’s standard of living keeps on increasing as their income increases. The said person was able to comfortably lead a lifestyle with a lesser income. With a higher one, though, it suddenly becomes distasteful to them.

Beware of falling in this trap. If at any point your income increases, automate the extra amount so that it lands in your savings account and is not available for you to spend.

This added amount can help you reach your retirement goals faster, pay off debt quicker with lesser interest, or maybe save up for your dream house so you can pay off a large amount in cash. Be discerning, delay gratification, and live a lifestyle that doesn’t come with a heavy price tag.

Surround yourself with the right people

 ‘You’re the average of the five people you spend the most time with.’ This quote by Jim Rohn is widely used all over the world to caution someone of the company they keep.

Whether it is scientifically true or not, a person is heavily influenced by the people s/he is surrounded by. Their thought patterns, perspective on the world, and emotional waves do rub off on them.

Thus, if one is looking to create long-term wealth, they must surround themselves with people who have the same vision. These people must also be dedicated to sticking to healthy financial habits if they don’t already have them. There is a lot to learn simply by knowing another person’s process of building wealth. It also prevents you from slipping into bad money habits and backsliding on your goals. This is highly likely if the people around you aren’t concerned with wealth and are living from paycheck to paycheck.

So, carefully choose the company you keep. It could create or repel wealth.

Conclusion

Money and wealth are not exclusive to a select few as many people believe. Anyone with the right habits can build their desired wealth. Moreover, when one sees and feels their money corpus growing, it is hugely motivating and further spurs the creation of wealth.

So, get started today with one habit. You do not have to take them all on in one go. Be consistent, however, and watch the money magic happening right before your very eyes!

AN Feb 71/20

Talk to an Expert