I would like to edit the topic question: How can I become rich on my own when I am still young? Man can also become rich through inheritance. That’s why I don’t think about hereditary wealth. How do you create wealth yourself? It’s not easy. You will have to work really hard. If you are lucky, you will get rich faster. I mean success, favorable conditions.
The hard part: A complex growth rate rule and the starting point of your trajectory.
Zero never gives you growth. No matter what growth rate you apply to zero, it always remains zero. You must first enter the positive zone. The initial amount has the greatest impact on your wealth. Therefore, you should earn this large initial amount as soon as possible. For example, you invest $ 1 at a 10% compound rate, and in about 14 years it will be $ 4, and at the end of 21.5 years it will be $ 8. You will be rich for $ 8. At the same time, if your initial investment is $ 1,000,000, you will receive $ 8,000,000 at the end of 21.5 years at 10% compound interest (800% of the initial investment). The coordinate point where your trajectory passes is very important.
Smart investing will make you rich:
If you can get a higher growth rate, you will get rich faster. In the previous example, we considered only a 10% compound increase. In fact, if you invest your money wisely, you can get a higher rate. When I was young, I invested $ 5,000 in a mutual fund (tax scheme, closing period of 3 years) to receive tax benefits. After 3 years, NAV reached 500% of the initial bid price. I got $ 25,000. If I had invested more in this investment, I would have been rich at the age of 28. It was one auspicious time in life. It is rare in life. You can get such favorable conditions 3 or 4 times in your life. 3 or 4 because you missed some in the past and you can miss more in the future. Determining such conditions is the key to being rich. In general, young people will miss the first chance, even as I missed. If your brain is engaged in non-financial activities, you will miss the early chances. Only experience will teach you.
Short-term investments will not make you rich:
Time is another important deciding factor. The collection takes its time. Higher rates of time and complex growth will make you richer. If you want to be rich in 7 years, then the growth rate should be higher. If your goal is $ 1,000,000,000 and you only have $ 100 now, you need to increase it 10 times a year to reach your goal. This is an unusual growth rate. So it is very difficult to become a billionaire with an investment of $ 100. The probability is very, very low. Therefore, do not set unrealistic goals. Give yourself time to accumulate your wealth.
The people around you are another important factor:
99% of the people around you will force you to spend your money. My father asked me for money to invest in plantain. I gave him the money he wanted. A year later, he told me that all the planets were flattened by the monsoon wind. His income was zero. My money went with the wind.
When I was 25, my uncle advised me to buy a car. I didn’t have money to buy a car. I had to borrow money. I could easily get a loan from a bank. Somehow, I postponed the idea of buying a car at that time, it was really undesirable. That decision was good and made me richer now.
One of my neighbors was ready to sell his house and offered me a price. I didn’t have any money then. I had only half the money. I would take a loan from the bank for the remaining amount. Somehow, I refused the offer. It was a really bad decision I made in my life. This investment has brought me 100,000% profit so far. This is different favorable conditions that I missed.
Do not invest in the stock market without learning the basics
I once bought 100 shares of a company (IT). Each share cost me 1,200 manat. In 6 months, the market price was 3,600. I did not sell it thinking it was a valuable stock. I decided to keep it for a long time. The following month, some headwinds began to bring down. The whole stock exchange was nose diving. My stock reached below 40 or 45. I lost all my money. Again, I did not sell, because there was nothing to lose more. I waited and waited patiently for 7 years for the price to rise to 85. During this time, the company adjusted and consolidated its market share. I bought more shares of the same company. After 10 years it is now trading at its previous peak.
In addition to the above, another stock I invested in about 45 did not even rise to 100 in the first 10 years. In the next 3 years it rose to 250. Over the next 3 years it exceeded 1,000 and is currently trading around 1,500.
However, there are other stocks that can never rise after the collapse.
This is how stocks behave in the market. There are reasons for this. You need to learn the basics.
My advice is to live consciously. Explore your surroundings and look for favorable conditions. Spend time and money to improve yourself that will always help you. One favorable condition is enough to make you rich. Be careful. Don’t miss it.