5 Hacks To Improve Your Wealth

Finances aren’t a matter of wishful thinking and require consistent and smart planning. Whether you are a student or a high-net-worth-individual (HNWI), you must grow, spend, and invest your money. But, active involvement in the task is expected.

It is not difficult to come across hacks about wealth management. You’ll get to hear about them through word-of-mouth lessons or editorials in magazines. In any case, today, we will keep it short for you.

If you want to ensure that your wealth improves, you must keep these five hacks in mind. Let’s take a look at what these are.

1. Budget

Budgeting is not about tabular collection and analysis of financial data. Well, you don’t need to take the route at all. All you need is to have clear assumptions, limitations, and trackers about your money. How much do you have? Have you been saving anything till now? Do you have investments? Are any children or dependents to consider? Where do you spend the most, retail or medicine? Like these, there are several examples of factors you should be clear about in your head.

Keep a diary or notepad with you to register expenses. If you don’t like to micromanage your finances, don’t. Only register the more frequent and/or larger expenses. But, always have a budget. It helps streamline financial management.

2. Goals

Being goal-oriented helps, and this goes beyond budget-making. You can keep saving money but must know where you want to spend them. Different goals, after all, may require different management strategies.

For example, you intend to save up for a house purchase in the future. Willing to pay up a sizeable payment, you’ll have to save a larger portion of your income, especially if you are time-bound. Also, you may want to invest in high-yielding assets such as stocks or mutual funds. Start with a goal. With a goal in mind, you’ll be able to distribute your money systematically.

3. Multiple Income Sources

A side hustle is immensely helpful. Today, freelancing or part-time jobs are becoming increasingly popular.

The growth rate in a typical full-time job is heavily determined by many factors beyond our control. As a freelancer, you’re able to choose, explore, and earn from multiple directions. There’s more mobility; there’re more opportunities.

Unfortunately, these side hustles come with little security. So, you may want to stick to your full-time job until you’re steady in the freelance world. But, use the money from these side gigs to fuel your other ambitions, such as travel.

4. Invest

Savings schemes such as Fixed-Deposits do not grow your money against inflation. But, of course, these are risk-aversive tools, and it is perfectly okay to keep some money in these schemes. But not all of it. You don’t have to take the leap of faith. Several investment vehicles are available depending on you and your state of affairs, including finances.

Young individuals are advised to progressively and systematically invest in high-growth assets such as Mutual Funds. However, people nearing retirement are advised to keep more money in FDs.

But, whatever path you choose, make sure you create and manage a diverse portfolio. This means the distribution of resources across different assets to be able to offset losses and maintain a margin of profit.

5. Tax Planning

Unless you start early, you won’t be able to save enough. Taxes can be cruel to your finances. If your income breaches a certain threshold, you’re mandated to pay up your taxes under the law. Failure can lead to hefty fines and, in some cases, imprisonment.

Governments often come up with tax-saving schemes for different taxpayers. You should consult with a financial advisor who can help you with tax filings and apply for exemptions and deductions.

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