4 Simple Plans To Get RICH

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I would think (almost) everybody will want to get rich, I mean financially wealthy. Some will denied that intention publicly, some will embrace it cheerfully. But most of those people, probably won’t have a real clue how to get rich. Because getting rich is not merely a result of getting more income. It has to follow the 4 simple plans outline below. It’s simple as anyone will understand it, but I did not say it’s easy. The good thing is, everybody can really follow these plans and the difference is just how fast they will make a significant progress to become much more wealthy.

  1. Earn more income
  2. Spend less money than what you earn
  3. Invest the difference between (1) and (2)
  4. Protect all activity above: (1) and (2) and (3) with insurance.

4 Simple Plans To Get RICH

PLAN 1: EARN MORE INCOME :
The goal in this first plan is to earn as much money as possible and increase your income every single year above the inflation rate. For example: if the inflation rate is 5% then you need to increase your income at least by 6% or more.

But it does not necessarily mean asking a pay rise from the company that you are working for. Fine if you can get a pay rise, but your income could increase by doing freelancing, some part time job at late evening or week end, It does not mean you increase the price of your product eithr, but perhaps get some more customer will do.

PLAN 2: SPEND LESS MONEY THAN WHAT YOU EARN. AS LESS AS CONVENIENTLY POSSIBLE.
This is where your budgeting strategy come into the play. With budgeting, you need to make sure your income is larger than your spending. Delay instant gratification and just plan ahead of the actual need. Not only you become more in control on your spending behavior but this will maximize your saving. The counter balance is that you should still live comfortably. For example: budgeting only eating every second day is not only not comfortable, but it also absurd and not healhty. Don’t do that. But reducing eating out at the restaurant from weekly to biweekly is something that everybody can do.

PLAN 3: INVEST THE DIFFERENCE BETWEEN (1) AND (2)
The goal here is to make return of investment as high as possible, which includes following aspect:

The higher the saving (difference between income and spending), the more capital you have. The more capital the higher the return value. Choosing the right investment strategy is crucial. Putting money in saving account in the bank is the standard here. This method of investment is too slow and will not get you to richness level that you want. You need to be able to choose other investment strategy that give much better return. Accelerate investment with debt

PLAN 4: PROTECT ALL ACTIVITY ABOVE: (1) AND (2) AND (3) WITH INSURANCE.
When I mention “insurance” it does not necessarily only insurance product that you can buy from insurance company, but in wider understanding. The goal on this plan is to protect whatever we already have as much possible against any unexpected occurrence a.k.a “risk”. This plan will includes:

  • Protect your income with “income protection” insurance
  • Protect your spending by purchasing insurance that limit your liability: car insurance, indemnity insurance, business insurance, health insurance, etc
  • Protect your investment with some kind of hedging or capital loss protection such as put option protection or some other advance scheme. With this, even there is another global financial crisis that bring down practically everything down to its knee , the value of your investment is protected. Especially if you are using debt as leverage, managing risk is a must.
  • Protect the whole activity by having “emergency fund” (before even do investing) that guarantee you can do everything as per normal for at least 6 months without any income at all

Without all the protection above, you will be vulnerable of any mishap and unexpected circumstances. Remember nobody will really know what happen next.