Simplest Formula to Become Wealthy

wealth formula

Mathematics always helps in solving personal financial problem. You apply number of formulas in financial life like IRR, CAGR, Absolute return etc. But do you know formula to become wealthy. I am here with simplest formula to become wealthy!

While doing financial behavior analysis I found four different people operating on four different formulas.

(1)   Income – Saving = Expense (I – S = E)

These types of people on receipt on income keep certain money aside as saving and then spend the rest. They keep saving either in bank account or may be in low risk low return investment instrument.

(2)   Income – Expense = Saving (I–E = S)

These types of people believe in different theory. They earn money, spend money and if anything is left save it.

(3)   Income + Borrowing = Expense ( I+B = E)

Today’s generation believes in above formula they spend entire income borrow money and blow entire amount at expenditure.

(4)   Income – Investment = Expense  (I-I= E)

Above formula is simplest formula to become wealthy. Generate more and more income, Invest as soon as you receive you income and spend remaining amount to fulfill your essential need.

I suppose we already know this formula but do not follow it. If we follow this formula regularly wealth will follow us.

Become Wealthy

How to build Wealth?

Simple steps towards building wealth are to (1) plan, (2) budget, (3) learn, (4) earn, (5) save, and (6) invest. Remember Wealth building requires discipline. If you really want to build wealth and are having difficulty achieving the level you desire, you might consider professional guidance.

I am always happy to hear if you agree or disagree with my views.(or how above formula can be improved).

Article by Raviraj

Raviraj is the man behind moneyexcel.com. He is graduate in finance, engaged in blogging since 6 years. Moneyexcel blog is ranked as one of the Top 10 Personal Finance Blog in India. He is not affiliated with any financial product, service provider, agent or broker. The purpose of this blog is to spread financial awareness and help people in achieving excellence for money. Please note that the views expressed on this Blog/Comments are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.

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