~~~A day to Save, A day to spend~~~. Review on Tips on Saving Money

Tips on saving money! Probably I am not the right person to advice on that for I am a failure when it comes to save money. Still, I learned few lessons from my failures and it helped at times. So, sharing few of my thoughts in this virtual world.

Why the rich people are getting richer and poor people remain poor? The questions has haunted many for centuries. The best of answer I found so far is from Robert Kiyozaki who wrote 'Rich Dad Poor Dad'. According to Kiyozaki, the reason is that of saving, i.e. remaining of revenue less Expense. Rich people have money to spend and they may have remaining and that they invest. Poor will not have money to meet their expenses and they borrow by paying interest. That means the rich will get interest/revenue on the saving where the poor has to pay interest on the money they borrowed. No wonder the Rich getting Richer and Poor getting poorer as the reason is that without saving, you will not earn anything. Without sowing you cannot reap.

What is the way out for the poor? The only way out is saving from the monthly bills. That means they have to increase their revenue or reduce the expenses. Increase of revenue can be done by increasing hours of work, increasing quality of work and getting higher remuneration for hour, getting training and getting better job, investing in alternative forms and earning parallel etc. Then, if your revenue is fixed and there is no way of increasing it one has no other choice but to cut expenses. There are three category for expenses; Necessities, comforts and luxuries. If you are not saving and you have luxuries in the list it is high time for you to cut those luxuries for some peaceful time for present and saving for luxuries of future. If you find yourself of no luxury man, just check with your neighbour as well to make sure. If finished of luxuries, then check your comforts and attack something where the result is negligible. You should not cut on necessities. If you are yet to meet your necessities, time for you to pack up your bag and start a journey. There is a world outside. Even if one is a beggar they should pack the bags as there are better places to beg.

Few random tips:

1. Make a determined effort to save a certain percentage of your salary, no matter what. Say 10 percent. Let the world come down but keep this 10 percent and invest in something which is productive in long term. (If you are fully in debt, read biography of Dostoevsky and learn from Anna Dostoevsky, to learn how to address such situations.)

2. Invest where the interest is better than inflation, without any risk. Means, the revenue should be real. Many a time, when government doesn't keep the interest rates to meet the inflation, any amount you deposit will help you to loose the value of it slowly but steadily.

3. When entering risky ventures like real estate, stock market etc. enter only if you know the long term and short term play of it. National and international, micro and macro! If you don't want to study and practice all that, don't engage in a long term game which will make your case a sure loss. If you want to take some risk and try, try it in the right moment and take some risk and the moment you have a substantial gain, withdraw from the market. You can think of another try later, not now.

4. If you are looking for long term investment, buying shares of some potential companies when they announce IPOs is a good option but you make a determination that you will not sell it before reaching 5 years or 10 years, no matter what. If your selection is good, you may gain multifold profit.

5. Keep your 10 percent of saving in charity. That is right. Just give away to people who rightly deserve. Believe me, this is a wise investment which will give multifold returns. If you are strong enough, sponser a child's education and let him know that you are sponsering him/her. If you have still more money, invest in a sports star or a writer. When you donate assume that the money is gone from you and you don't expect 'anything' in return. Invest in friends, relatives, neighbours, no problem. Some day, some time, in some form it will return to you. It may not necessarily as rupees but sometimes much more worthwhile than it. This is from my experience. Then, if you get a feel that you are been used, stop helping the person immediately and find a good soul for that. We should not sow in fields which is not fertile.

6. Invest in knowledge and wisdom. Try to learn new subjects, languages and techniques. Invest in experience and in getting expertise. New knowledge is a new door. Attempt new areas which not many tried! Don't dare to climb ladders. Remember, there will be tough competition in the down the ladder but there will be always vacancies on the top. Read books like Rich Dad, Poor Dad, Think and Grow Rich, The Richest man in Babylon and the like. Take advices with little salt and pepper and don't consume it without discretion.

7. Use quality products instead of cheap products. When you consider the durability and quality feel we get from it, we will realise that branded products are comparatively cheaper. If quality comes with low price, fine but don't simply go only for low price.

8. If you are investing in something or engage in a business, learn more about the business. If you don't have the knowledge, seek it from who have it. Hire best of staff to help you. They are helping you to increase your wealth, so treat them with deserved respect.

9. Give, you will get. As a customer, we all will be looking for better quality product for cheaper price. Remember this and try to apply in practice. If you are running a grocery or if you have hundred products to sell, sell 5 percent of the products on cost or say 1 percentage profit while keeping rest of the products on normal prices. Note, normal prices. Don't increase 95 percent products prices and reduce prices of 5 percent. I mean, when you give, you really give. That will increase your customer base and confidence among them.

10. Don't invest in highly inflated products with long term goal. You will not win. Market has a common law of supply and demand. When the profit rates go up and up there will be many buyers and the prices will rocket. Then, it cannot go like that endlessly. One day it will fall and the recovery of the principal even may be difficult.

I can continue this list endlessly...but I think I should stop here. The above is only random thought, not organised. Then, that is what comes to my mind when start thinking about tips on saving. Hope you have some views to share as well. Do so, as it may be more helpful to readers than the post itself.