New Delhi: There are so many books, guides, resources, etc., that teach one thing or the other for people to learn about finances, how they can earn big and save big and the like. However, only experts, wealth specialists and mentors can truly help people, making them realize that getting rich is never a quick game. Ron Malhotra is one such name in the business world who has excelled beyond boundaries as a wealth specialist, business advisor, mentor and entrepreneur, who explains that most people think getting rich is about investment returns, being highly intellectual or understanding complex finance.
But in reality, getting rich is about understanding how compound interest works, how human psychology works and how the economy works.
The fact is people are only taught how to make money to survive. They are not taught how to keep and multiply money to thrive.
The worst part is that the finance industry globally provides minute by minute information that actually makes people bad at investing. You don't need more information if you want to become financially wealthy. What people need is discipline, commitment and patience. Instead of watching markets daily, people need to be taught money management and investing skills. Even though people may have learnt about compound interest at school, they don't really understand its practical applications as it relates to the accumulation of wealth.
Most people don't understand that a person, who invests early, invests less and holds on to their investments longer, is likely to outperform those who start late and sell early even if they invest a larger amount in many cases. Many people falsely assume that it takes a lot of money to make wealth. In most cases, the truth is that it takes a lot of time and a little bit of money to create wealth.
Talking about his personal asset values, Ron Malhotra says they have compounded and risen in value more in the last 5 years than the 15 years before. However, he would have never benefited from this snowball effect if he hadn't started two decades ago.
Things get more expensive with the time. Good quality assets tend to grow in value, maybe not every year, but certainly in 10-15 years. It's alleged that Warren Buffet made $85 billion of his $89 billion net worth after the age of 65. That's the power of compounding. Unfortunately, the ignorance of this simple wealth principle results in people focusing more on making money over making wealth.
It's also resulting in people spending most of their incomes on consumerism and entertainment and buying more lifestyle assets instead of investment assets. Ultimately it's not more information that results in better financial decisions, it's an understanding of psychology and long term thinking that results in better financial decisions. As simple as this fact is, most are hopelessly hooked to consuming daily financial media to make their financial decisions, or worse, they already believe that it's too hard for them to create wealth.
(Disclaimer: This is a Brand Desk Content)