Wealth wisdom: ‘Single most important factor to getting rich is…’ - Personal finance insight from Indian-origin millionaire that actually works

If you believe that being the smartest person in the room is the most crucial factor to getting rich, you might be wrong. Indian-origin self-made millionaire and the author of ‘I Will Teach You To Be Rich’ – Ramit Sethi – has shared some simple yet practical strategies for achieving long-term financial freedom.

Sethi has talked about a few financial lessons that made him rich, which include understanding the power of compound interest, running the numbers on buying vs renting, starting a business, fighting for simplicity, and most importantly building the skill of spending money.

He says, “The point of money is not to accumulate it. It's to live a Rich Life.”

Wealth wisdom: ‘Single most important factor to getting rich is…’ - Indian-origin millionaire’s finance philosophy

In his book ‘I Will Teach You To Be Rich’, Sethi has written, “The single most important factor to getting rich is getting started, not being the smartest person in the room.”

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And rightly so! If you never start thinking, reading and working around your, how would you see it grow. Sethi argues that people have various reasons for not managing their money. While some of them are valid, most, he says, are poorly veiled excuses for laziness or not having spent time on research.

So, leave the excuses behind and get started with your money – first research, learnings and then finally implementing this information to some use.

Want to get rich? Practical tips that actually work

In the updated edition of his book, Sethi has listed out a few practical strategies and ideas which can actually help someone who wants to get better at money, or is aspiring to get rich. He talks about the following steps individuals can take to start in their money journey:

Optimise your credit cards - Sethi explains that people need to stop being intimidated by your credit cards and rather do the research to pick the best card for different purposes (airline miles, cash back, and rewards), among other things.

Beat the banks – “Open high-interest, low-hassle accounts and negotiate fees like an Indian,” he writes. In this step, the Indian-origin millionaire talks about why you really need a separate savings account, why people stick with terrible bank accounts, along with marketing tactics banks use to trick you.

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Get ready to invest – This is what it sounds. Just start investing – step-by-step. Sethi delves into investing in being the most effective way to get rich, along with discussing where the money should go?

Conscious spending – This is a no-brainer. Right from your mother to top personal finance experts, you would have heard everyone talk about managing the spending habits. There’s a difference between cheap people and conscious spenders, according to Sethi.

Conscious spending doesn’t necessarily mean that you never use the money towards anything other than needs and investing. It is more about spend extravagantly on the things you love and cut costs mercilessly on the things you don’t, without making an annoying budget, Sethi says. He even lists 4 buckets for this: fixed costs, savings, investments, and guilt-free spending money.

Save while sleeping – This is similar to what ‘Rich Dad Poor Dad’ fame Robert Kiyosaki has said in his book – make your money work for you, even when you sleep. You need to create an automatic money flow along with automating finances to fuel your rich life, as you proceed in your journey to getting rich.

Investing isn’t only for the rich – Of course not!Some research and analysis, and a smart allocation as per goals can send you miles ahead than other, who never even start. Also, let compounding do the magic for you.