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What does it mean to be rich?

What's the first thing that comes to your mind when you think of being rich?

In the last 10 days, we have conducted personalized Financial Planning Workshops for over 150 clients, and here are 5 most popular responses of the attendees:

• Not have to worry about money ever again
• Freedom to spend as I like
• Early retirement on my own terms
• Ability to take a holiday anytime and anywhere
• Financial security

Numerous other answers were just alternative interpretations around these above themes. The common thread is that being rich is about having the financial freedom and flexibility to do what you want without feeling constrained

As financial advisors, we strongly believe that one does not need a high salary to be rich, but its what you do with the salary you get or the income you generate. One could have a very high income, yet one might be so indebted because of one's lifestyle or financial habits, that one's net worth might not show any sign of being rich.

So, whats the best course of action to get rich when you get your monthly income? Its pretty simple really. Its all about the discipline of taking a share of your income to build assets that can generate income. His can be an alternative source to your primary source of income. What you earn from this alternative source can be used to create still further assets. Within a short period of a few years, you can get into the virtuous cycle of generating lots of additional sources of income.

Rather than spend from your salary, if you invest this salary and then spend the income generated from these investments, your salary can continually be used to facilitate the process of compounding of your capital. Your investment income can make you feel and act rich by giving you financial freedom and flexibility that is not limited to what you can achieve with your salary alone.

Getting into this virtuous cycle might seem hard, but all it requires is some discipline on your part. Books such as Rich Dad, Poor Dad have popularized the above idea in ways that are easy to understand and implement. Look around you and you will see colleagues at work who earn as much as you do, but might have more financial freedom because they have followed the ideas promoted in these self-help books.

So next time you get handed a pay cheque ask yourself what is the best way to use this money if you want to get rich. Its all in your hands!

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