I would like to edit the topic question: How can I become rich only when I am still young? One can also get rich through inheritance. Therefore, I am not considering inherited wealth. How do you create wealth yourself? It’s not easy. You will have to work really hard. If luck favors you, you will be rich faster. Luck, I mean favorable conditions.
The hard part: Composite growth rate rule and starting point of your trajectory.
Zero never gives you growth. Whatever rate of growth you apply zero always remains zero. First, you need to enter the positive zone. The initial amount is the biggest impact on your wealth. Therefore, you need to earn this big starting amount faster. For example, you invest $ 1 at a compound rate of 10%, after approximately 14 years it will become $ 4, at the end of 21.5 years it will become $ 8. You will be rich at $ 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 a 10% compound rate (800% of the initial investment). The coordination point from where your trajectory develops is very important.
Wise investing will make you rich:
If you are able to get a higher growth rate you will get rich faster. In the previous example we considered only 10% of composite growth. In fact, you can get a higher rate if you invest your money wisely. When I was young, I invested in a mutual fund (tax scheme, 3-year closing period) a sum of $ 5000 to get tax breaks. After 3 years, NAV was 500% of the initial bid price. I got $ 25,000. If I invested more in this investment I would be 28 years old. That was one favorable time in life. Rarely rare in life. You can get this kind of favorable terms 3 or 4 times in your life. 3 or 4 because you have lost some in the past and may miss some more in the future. Identifying such conditions is the key to getting rich. Overall, young people will miss the first chance or even more as I missed. You will lose early chances if your mind is involved in non-financial activities. Only experience will teach you.
Short-term investments will not make you richer:
Time is another important decisive factor. Accumulation takes its time. The time and the highest rate of complicated growth will make you rich. If you want to be rich in 7 years, then the growth rate should be much higher. If your target is $ 1,000,000,000 and you now only have $ 100, then each year must increase 10 times in order to reach your target. This is an extraordinary growth rate. So it is quite difficult to become a billionaire with a $ 100 investment. The probability is very, very low. Therefore, do not set an unrealistic goal. Allow time to accumulate your wealth.
The people around you is another important factor:
99% of the people around you will make you spend your money. My father asked me for money to invest in the plantain crop. I gave him the money he asked for. After 1 year he told me that the whole plantain crop had been flattened by the monsoon wind. The return he got was zero. My money was also gone in the wind.
My uncle advised me to buy a car when I was 25 years old. I did not have enough money to buy a car. I had to borrow money. I would have taken out a bank loan easily. Somehow, I pushed the idea of buying a car at the time, which was really an unwanted thing. This decision was good and made me richer now.
One of my neighbors was about to sell his house and offered me a price. I had no money at that time. I only had half the money. I would have taken out a bank loan for the remaining amount. Somehow, I turned down the offer. This was really, really a bad decision I made in my life. This investment would have made me 100000% profit by now. This is another favorable condition who lost me.
Do not invest in the stock market without learning the basics
After I bought 100 parts of a company (IT). Each stock cost me 1200. Within 6 months, the market price reached 3600. I did not sell it thinking it was a worthwhile stock. I decided to keep it long. The next month, he started falling because of the gust of wind. The whole stock market was dipping into the nose. My stock reached the bottom of the issued price of 40 or 45. I lost all my money. However, I did not sell it because there was nothing to lose more. I waited and waited for 7 years patiently to see the price go up to 85. During this period, the company had corrected and consolidated its market share. I bought more shares of the same company. After 10 years, now it is trading at its previous peak.
Another stock I invested along with the above mentioned about 45 was not climbed to 100 in the initial 10 year period. In the next 3 years, he climbed to 250. In the following 3 years, he crossed 1000 and now traded around 1500.
However, there are other stocks that had never been able to raise their head after the fall.
This is how stocks behave in the market. There are reasons why they behave this way. You need to learn the basics.
My advice is a conscious life. Study your surroundings and look for favorable conditions. Invest time and money to improve yourself, which will always help you. A favorable condition is enough to make you rich. Be attentive. Do not lose it.