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Earning can make you rich!! Maybe no, but what can surely make you rich is proper financial planning.

To do proper financial planning, we should first consider some aspect which we usually ignored while doing so

1) Inflation

The most common aspect that people ignored during financial planning. Let's take a small example to understand to inflation effect our purchasing power and make your make worth less. By the way, I said it worth less not 'worthless'.

If I have Rs 100 and I deposited it in bank fixed deposit having interest rate @8%.You will get Rs 108 after 1 year. But at the same time, if inflation rate is 9% your deposit earning is less than increase in inflation making bank deposit not a good option for Investment.

In short, your investment should generate atleast as much return as inflation rate in the economy.

2) Don't accumulate cash

We all know Cash is an asset. But if you thing from financial prospective it's like a liability. How?

Here is the answer: Cash on its own is just a piece of paper.Accumulating cash will not bring you anything.It can give you return only when it is used as source of exchange goods and services. As discussed above,inflation cause decrease in your purchasing power thus thereby decrease you cash value.

So don't accumulate it, put it to the work.

3) Focus on cashflow generating assets

The biggest reason for people  not growing rich  is we does not make proper allocation of our resources.

Either we will put entire money in one investment  and we usually make investment in assets that do not generate regular cash flow for us.

Regular cashflow is the king in creating up your wealth, your business and in regular payment of your debt which is necessity while setting up your first business or venture.

4) Don't spend on consumption products

As people's income increases, people starts spending too much on consumption products like costly watches,cars etc. There is nothing wrong in purchasing these items,but in initial stage of setting up business, your business needs more and more reinvestment rather on these useless things just to show off other people.

5) Have multiple source of income

Today's when there is 24/7 availability everywhere, there is should not be excuse how to earn from different sources.This is area of which most people even don't think about.

You can earn by writing blogs and articles, online teaching, web designing and by providing endless services. There is job for everyone nowadays. Just you have to find the right one for you.

So never play with your money. It does not matter whether you love money or not, but everyone loves the stuff money can do. So start valuing your money.

The author can also be reached at


Published by

Shobhit Jain
Category Others   Report

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