Being rich is everyone’s dream. Many people work hard to fulfill this dream, so many people want to be rich as soon as possible, but the truth is that only a few people are able to fulfill the dream of becoming rich. So if you also want to save your earnings and become rich, then you need to know how to become rich. For this, first of all it is important that you understand the easy personal finance rules of earning and savings.
Here we tell you what is the easy formula to become rich? If you follow these sources properly, then you will never lack money in life. Not only this, no one will be able to stop you from becoming a millionaire. So let’s know …
Many people do not become rich even after earning good. Because they neither know how to save money nor invest their money in the right place. But it is not necessary to have strong income to become rich. By saving some money from whatever you earn, you can become rich by investing it in the right place. Talking about how to become rich, it includes making budget, saving and investing according to your earnings.
To become rich, first of all you have to do financial planning from how to use money to where and how much to invest. 50-30-20 rules are a great and easy way to save money. Under this, you will have to divide your earning money into three different parts from need to savings. This 50-30-20 rule means that you should keep 50 percent of your monthly expenditure. Apart from this, 30 percent share should be kept to fulfill your hobby. Also, the remaining 20 percent of the earnings should be saved for future needs and investing in the right place.
If you think that you can get good returns by depositing money in your savings account, then it is not true. You get very little returns in savings account. But if you want to earn more interest by depositing money in a savings account, then it will be better for you to choose the option of auto sweep facility. You can activate the auto sweep facility in a savings account by contacting your bank, if the money in your savings account exceeds a limit, the extra money from the limit automatically transferred to the fixed deposit account. After this you get FD -like Return (Best FD Return) on the savings account. In this, you get 5-7 percent more returns in this.
Keeping in mind the emergency of the future, one should put at least six times the emergency fund of your monthly income. This is a great way of safe investment. In simple words, if your monthly expenditure is 1 lakh, then you should save 6 lakhs to deal with the future emergency.
The best way to calculate the minimum insurance amount in Term Life Insurance is 20X term insurance. This means that you should have twenty times term insurance cover of annual income. Insurance experts believe that the term life insurance cover should be at least 15 to 20 times the current annual income.