How to Get Rich: 4 Simple Plans To Do

   

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.

How to Get Rich Explained: 4 Simple Plans

Without further due, these are the 4 simple plans that will make you rich but only if you do it all:

1. Earn more income. Make sure your income beat the inflation
2. Spend less money than what you earn. As less as conveniently possible.
3. Invest the difference between (1) and (2)
4. Protect all activity above: (1) and (2) and (3) with insurance.

Financially Wealthy

That’s it. That’s the very key secret of getting financially rich. The only caveat here is : you need to do all fours without exception. If you do all four, then the different between one people and other people is the speed to become rich. Some will be very quick and enjoy the the rest of their life as rich man. But for some, the speed toward richness is just too slow that they will sadly be gone first before it got there.

Plan 1:  Earn more income. Make sure your increase of income beat the inflation

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. Just prepare enough for the worst, just in case.

Complicated ?

I hope the essences of those 4 plans above is not too complicated for you. Basically all your activity in pursue of wealth can be categorized into one of those 4 plans.

Now you know the big picture how to get rich, the next step will either:

1. to implement the 4 simple plans above into real tactical strategy how to do it the fastest –or–
2. to make excuses that the plans will not work

Remember the quote from Henry Ford: “Whether you think you can or can’t, either way you are right“ This is just the way things work. So, your call !

One important note before I end this article: the journey to wealth is not easy and require a lot of sacrifices, but it does not mean that you have to suffer. On the contrary you still need to make it enjoyable on the way, for example: make sure still have quality family time every day and weekend despite extra part time work, still budget for holidaying together every now and then, although not as often but you should still enjoy eating out with family and friends, etc.

Of course if you lucky enough to get that 50 million lottery jackpot, don’t worry about above plans. The question is how do you control it that you will get it someday ? Maybe do something more within your control like these 4 simple plan.

Hope this inspires you ! Take Care!

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Denis Kristanda  

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