It has been deeply engraved and rooted in the mind of general individuals that getting wealth and accumulating money is impossible and only lucky people can be rich. However, if one would speak to people who accumulated wealth, they would tell it is easier. Financial and tax consultant can acts as helping hands to the businesses and its clients. We shall strive upon to help clients to get rich and enhance their wealth.
1. Tax Planning
It is seen that various taxpayers do not even claim basic deduction of Rs. 1,50,000 under Section 80C of the Income-Tax Act, 1961 which gives a tax-free return in many cases on both principal as well as on interest portion. Few examples are Public Provident Fund (PPF), Sukanya Samridhi Scheme, Senior Citizens Savings Scheme (SCSS), Tax saving mutual funds under ELSS, Principal repayment of housing loan, stamp duty payment of residential house, children school fees etc.
We must guide our clients to claim such deduction to reduce their tax burden. Every money saved would be available for expense in economy and further investment. There are many tax deductions one can claim like House Rent u/s 80GG or 10(13A). Investment in NPS (Tier-1) u/s 80CCD(1B),
2. Compounding the return
The human energy is limited but however, the economy and generations does better when years pass by. We are almost sure that our upcoming generation will be doing more innovation and would be faster and advanced. In order to reap the benefit of compounding returns of growing generations one must invest regularly. It is said that how much you invest does not matter, it is how consistently you invest that matters most. One must tax friendly and high return yielding investments in order to reap the benefit of compounding, The easiest ways are investing in Long Term Index Mutual Funds, NPS, PPF ad stocks.
3. Trim unnecessary expenses
We can skip those outside foods and chose the home cook delicacies, we can choose a local commutation/ Carpool over self-drive car, we can choose rented home instead of big-ticket home with high maintenance charges. Every penny saved builds our corpus.
Create multiple sources of income In order to fill your corpus and considering the advantage of current internet era once must always have a side hustle or hobby which helps to pay household expenses. Weekend teaching, career counseling, guest lectures, helping to manage and grow local shops, graphic designing, video editing and many other hobbies that can pay you money.
4. Remain debt free
Debts of any nature whether credit card, house loan or personal loan, it is a curse of living human. The interest rates of loans compounds against us and makes big hole in our pockets. We must thrive to change the way we live and never buy things we cannot afford. Fist earn than buy should by the philosophy.
5. Tracking a financial goal
It is said in financial world that it is hardest to earn your first crores after that your compounding multiply the money faster. One must have a financial goal in mind be it an own home, corpus of Rs. 1 Crore, buying a Car etc. A clear financial goal keeps you on track of learning and earning. Every penny we earn goes to betterment of society and economy.
There are millionaires and billionaires who followed these simple strategies consistently for a very long time which paid them good returns and made them free from financial decisions.
Author can be reached fcaarchitgoyal@gmail.com
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