Invest 10% on Expense

There is a simple way to generate abundance wealth in long term. Having said that it is a simple way, it is not easy. Most people would have started this well but on the due course, they would have left this continuation and failed in achieving that great success. The reason can be many like laziness, not serious about or lack of patience. Only when these kind of bad habits are taken out, there can be clear evidence of abundance wealth. It is a long journey of around 20 to 30 years. There can be many distractions or uncomfortness in following this simple process in this long life span. This can be achieved through self-discipline and determination with patience.

The point to achieve this is investing 10% of what we spend everyday or every month. Let's say we go to a movie and spend Rs.1,000. In this case, we need to definitely invest Rs.100 in any form of good returns giving instrument. This can be in gold, mutual fund, bond purchase, real estate or what so ever. It is individuals ability to identify the better returns giving instrument and invest on those. In other words, when a person follow the budget tracker or spending tracker, at the end of the month take the total expense made. Straight away calculate the 10% on that expense and invest for next month. So, 10% of last month's expense is this month's investment.

This can be broken into 2 categories:

• 
  Let's say i spend Rs.30,000 this month then my investment for next month is Rs.3,000. Does this sound so complicated ?. This total expenditure should include or a total of entertainment expenses, travel expenses / holiday, medical expenses, food expenses and everything which goes out of your pocket as a monthly expense we do. There is another side of this coin, if you could think over. When you have the commitment of investing 10% of your expenses, there is a possibility you would even try to reduce your unwanted expenses. This is even better and good for wealth generation

• 
  When we have EMI or any credit card bills to pay for the month, the above rule should be altered. One should invest 15% on the EMI and credit card bills every month. Let's say a person pays Rs.25,000 on EMI and Rs.10,000 on Credit card. The total amount of Rs. 35,000 should be considered for this 15% investment. So, this investment will come to Rs. 5,250. This is infact to reduce the EMI and Credit card usage in long term, which is considered as the barriers for wealth generation. One who understands this earlier in life will achieve the abundance wealth earlier as possible

Considering the above 2 situation, If we spend Rs.30,000 on monthly expenses and Rs.35,000 on EMI and Credit cards. we should be ready to invest Rs.8,250 every month. In due course this will become a habit and we will eventually try to reduce the expenses as much as possible and will try to avoid EMIs and credit cards. People might think, this will also reduce the investing amount every month. When a person builds the habit of investing every month, it will eventually make him / her to invest more month on month basis instead of reducing it. This is the power of consistent investing. The whole point on this exercise is to reduce the expenses and increase the investing behavior.

Can you imagine how much a person would be investing in a year by spending on above. This would be Rs.8,250 * 12 = Rs.99,000. Now, you can calculate the compounded returns of this amount over the period of next 20 to 30 years for your retirement. It is never late. Start low and slow. Compounding is the 8th wonder of this world and compounding with consistent investment is the 9th wonder of this world. But make sure you follow the consistency with patience to enjoy abundance wealth.

I believe this blog will give a better understanding on how to invest consistently every month on your expenses to gain abundance wealth in long term.

Have a Great Day

B G Nareshkumar