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How to Grow Your Money

Saving money is beyond parking surplus income after expenditure in a savings account. You should figure out how to grow money, i.e., get sufficient returns for your savings to beat inflation. All said and done, the challenge is developing a mindset to save. Inculcating the habit as soon as you start is the best way to begin. From the beginning, develop the habit of saving and spending rather than spending and saving. ...Read More

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8 Ways to Grow Your Money

8 Smart Ways To Grow Your Money
November 29, 2024

Table of Content

 

Saving money is important, and you must strive hard to put aside a part of your income for emergencies. But how can I grow my money is a difficult question to answer for many. However, there are several ways to increase wealth and some of them are given below:

  • Avoid Debt

The biggest hindrance to how to grow your money is debt. You should never resort to debts to come out of a financial situation. If you already have debts, try to clear high-interest debts like personal loans and credit card outstanding as early as possible. Commence investments only after you have cleared all the debts.

To begin with, put aside a part of the residual income until you have sufficient savings. Works towards passive income generation, like parking your savings in high-interest-yielding savings accounts. The interest generated increases your resources for further investment. Then, develop strategies for growing wealth and see the miracle happen.

  • Invest Regularly

Do not let the excitement of how to grow money fade. Being consistent in investments is the mantra for how can I grow money. Start with small but regular investments like contributions to mutual funds, NPS, EPF, PPF and life insurance policies with investment components etc. Use the best money-growing strategies like taking advantage of the compounding effect and creating a diverse portfolio to distribute risk and minimise losses. This disciplined approach can be a game changer. In brief, start small, be regular, and watch your growing savings.

  • Diversify Your Investments

The answer to how to make your money work for you is diversification, i.e., spreading your investment across various asset classes, stocks, bonds, mutual funds, a high-interest savings scheme, real estate, etc. Given the market volatility, if one asset does not perform well, the loss can be balanced with the assets that perform well. This way, you maximise investment opportunities, protect your wealth from eroding, and stride towards your financial goals.

  • Review Your Investments Periodically

For long-term wealth creation and effectively learning how to grow money, reviewing your investments periodically is critical. Financial goals change with every life stage. What matters to you when you are single may seem trivial after your marriage and when you start a family. Review your investments periodically and adjust them according to your financial goals, including your insurance coverage and any cash value accumulation. Also, monitoring the market trend regularly and changing the investment plans to align with your risk tolerance will go a long way in creating wealth and building financial security.

  • Start Early

Before understanding how can I grow money you should know wealth accumulation takes time. Nobody becomes a millionaire overnight. To focus on increasing financial assets you should start early and adapt money management tips to grow your money effectively. If the retirement age is 60, starting investment at 25 is a smart move. You give 35 years, which is ample time for your money to grow.

The advantage of starting early is deriving the benefit of compounding. Your money grows exponentially and is more effective if you stay invested for a longer period. The ground rule is to start early for better results.

  • Make Smart Investment Choices

Investment planning is an integral part of the ordeal of how to grow your money. Random choices will never help your money grow. An important caution is never to get lured by investment advertisements with tall claims. Understand the market trend. Make smart choices and invest in a savings plan that aligns with your risk tolerance and goals.

Follow your instinct. Never putting all the eggs in one basket is one of the financial growth strategies that you should follow. Diversify your investment portfolio and focus on money compounding strategies to balance the risk and set off losses.

If you are risk-averse, then you should contemplate investing in guaranteed and high-return investments like NPS, PPF, etc. Stock market, mutual funds, etc., are good bets if you have a good risk appetite.

  • Overcome Investment Fears

The key to how to grow money is overcoming investment fears. You cannot get rich by shying away from investments. Start with a small sum which you can afford to lose.

Explore ways of how to multiply savings, making smart choices, and watch yourself heading towards becoming rich.  Seek advice from a financial advisor till you are confident of investment choices.

  • Get Professional Advice

If you are a novice in the field and do not understand how to grow money, you should seek advice from professionals who are experienced and have proven strategies. They will help you in building an investment portfolio that matches your risk tolerance and goals.

Diversifying your portfolio to align with your changing goals and market trends to maximise returns can be overwhelming if you have to do it yourself when you lack experience. Consulting experts in the field will simplify the whole process and help you make informed decisions.

Conclusion

Saving money is important, but understanding how to grow money is the key to creating wealth. More than 5% surplus money out of your income should set you thinking about how to build wealth. If you do not understand the investment techniques, seek advice from experts who have robust financial strategies to multiply your savings. Smart investments with proper monitoring and adjustments according to changing goals, market trends, and income levels are the pathway to growing your money and becoming rich.

FAQs About How to Grow Money

Q. How to grow money fast?

To grow money fast, start early so that you have sufficient time to leverage the compounding effect. Explore ways of passive income generation to boost your primary income. Say no to debt or work towards becoming debt-free if you already have debts. Have an investment plan and stay disciplined to accelerate returns.

Q. How to grow money with low-risk investments?

Contemplating how to grow money with low-risk investments is the right approach if you are risk-averse. You can invest in high-interest savings accounts like fixed deposits, money market accounts, short-term certificates of deposits, etc., that yield better returns than regular savings accounts.

Q. What are the most effective strategies to grow money?

The most effective strategies to grow money are to start small but early, avoid debts, stay disciplined, make smart choices, have a diverse portfolio, review and adjust your investments periodically, and consult a professional for proven ways to create wealth.

Q. How to grow money with real estate?

Generally, growing money with real estate is done with property value appreciation. Most investors depend on income from rentals from commercial and residential properties. The other investment alternatives in real estate are Real Estate Investment Trusts (REITs), mortgage-backed securities (MBS), Real Estate Investment Groups (REIGs), etc.

Q. What is the 50-30 20 rule?

The 50:30:20 rule is the formula for dividing your income into three categories. 50% for mandatory expenses like groceries, utility bills, etc., 30% on what you wish, like entertainment, hobbies, etc., and 20% on savings and investments.

Q. How to manage your salary?

Managing salary is all about creating a surplus for investments. Track your expenses, create a budget and eliminate unnecessary expenses, set financial goals, create an emergency fund, invest for the future, and review and adjust your plan periodically to fit your goals and market trends. 

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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