The Journey of wealth Creation

Sunday Musings

The Journey Of Wealth Creation.

It intrigued me as I was learning about personal finance planning. We had a session on Home loan planning, Children’s Goals planning, Insurance, Retirement planning many more. Each of the plan is based on and proportional to one’s income right? 

Two major questions:

Q1. How crucial is this Ratio?

Q2. Is this ratio 50-30-20 constant for all? 

Seeking answers to these questions was quite a journey. Finally, I got a resolution to this from Senior Personal Finance Professional, Expert and Trainer Mr. Hitesh Soni. He gave me a very popular quote from none other than the master wealth creator Warren Buffet. I had read this quote many times before but it never made more sense than today.

”It’s never the income or salary that makes you RICH , it’s always the spending habits.

This one single quote, I could correlate to so many more wisdom quotes that lead to this one -Take away -”Always have right ratio of Income : Expenses”

1. popular one in Hindi – Never have “Aamdani Atthanni Kharacha Ruppaiah” (translated – Your expense exceeding your Income = Debt Trap) 
2. Nature has enough for everybody’s Needs but never enough for Everybody’s Greed – Mahatma Gandhi. So is true with your income, if proportionally spent it has enough for all your needs but never sufficient for your wants.
3. Everyone, a person with a salary of 10 thousand, One lakh or even Ten Lakh, has to have a proportional match of income and expense to embark journey of wealth creation.
4. Very practically categorise your spendings as “NEEDS” & “WANTS”. Remember needs are limited and wants are limitless.
5. “Chah Nahin Chintah Nahin Manwa Beparwaah, Ja Ko Kachuha Na Chahiye Woh Shahah Ke Shah” (No wants, No worries, He who wants nothing is Richest of all!). this is another extreme of increasing wealth but a great lesson to take! To become rich drop your wants!

We will continue this series on budgeting seeking answers to our two initial questions in the following weeks!