What are the rules to lead a happy life? food, house, clothes, car, at least 50% of our other desires to get fulfilled continually until we are alive. Of course, money is the main source to trade and get the needs fulfilled. Not all the time money can create prosperity. For instance,

1. A suggestion from a your friend or a well-wisher will help you to double your money.
2. A suggestion may help you to buy a great stock.
3. A Suggestion may help you to invest wisely.
4. A good relationship may get you property.
5. Right guidance may help you trade and generate property without even taking a penny from your pocket. However, the property will generate money.

Apparently, we all know that money can do many things, some people say, money can do everything. Well, the basics we need to understand here is

Rule-1

Currency is not only the option to create wealth, it is one among them, Planning the future, understanding the basics, having vision, knowing the limitations, knowing short term and long term goals, having good relationships, having analytical skills to invest at a right time , right place and a right sum helps to create the wealth. So, the basic rule we need to digest that currency is a trading tool but not a prosperity generation tool. Just like water, it changes it’s shape based on the item you pour it into. If you keep it under heat, it evaporates. If you keep it in the refrigerator, it freezes. If you mix it with a fruit, it will give a healthy drink. If you mix it with a peg of scotch, it gives a kick :), Choice is yours. In majority of the cases cracking a deal happens with a good relationship.

Sometimes a million dollar doesn’t matter in a great relationship but even a cent matters in commercials.

Narasimha Mohan

Personal wealth planning should have three layers 1. Base layer 2. Middle layer 3. Upper layer.

Rule-2 (Basic Layer)

First thing is first, health is wealth. Invest in keeping your health safe so that you can avoid spending lot of money on your body to work.

The essential basket you need to invest in is for your basic needs food and shelter. If you own a house major problem is solved to protect from nature, other people, animals, anti social elements, to have privacy for your family, and to have a social identity. Spending currency for every month on rent to fulfill these many basic needs is not advisable. So, invest in a home. If possible invest in agriculture to get your food needs fulfilled.

Find basics to create wealth, for instance, investing land is a better choice in India, investing in human resource in United States and Canada is better choice. Consequently, find right basket to invest to get 100% concrete appreciation. Life insurance is another basket to invest as it generates money in your absence and in presence for your loved ones. The basics of a base layer.

Start investing in the insurance basket at early twenties not in the mid forties or fifties. Because the early you start the more you can gain, it will generate more returns with less premium.

Rule -3 (Middle Layer)

Middle layer is the bridge between base layer and upper layer. The layer should be built in such a way to fund the base layer and upper layer. Create more than one income to have consistent life. Stock market, recurring deposit account, means consistently depositing some amount for a defined duration, the name may differ based on banking system of a nation. The account called as recurring deposit in India and saving account in United States. Insurance policies which will pay back in frequent intervals. Invest based on below priority.

1. Recurring deposit to get solid returns.
2. Fixed deposits for a defined duration.
3. Insurance policies to get pay backs.
4. Mutual funds will pay back with minimal risk.
5. Stock market investments which will have more risk.

Now, divide your savings into percentages. I would suggest to invest 5% of your savings into stock market so that the risk will be minimized. If you have a guaranteed second income other than the first income, you can invest more than 5% in stock market. Mutual funds — 10%, Fixed deposits — 25%, Recurring deposits — 30% (very potential channel of income growth). How will the middle layer work for you?

It will let you meet planned and unplanned expenses. Eventually, it minimizes the risk of falling into debt. Always remember one thumb rule. The debt creates debt, the loop continues until you burn all your savings.

Rule – 4 (Upper Layer)

As long as you are earning the ball keeps rotating, the moment you turn 60, your earning will stop. To lead a consistent life your basic and middle layers should work along with upper layer. Eventually, the upper layer is for retirement planning so rest of your 30% saving should go here. I would suggest to follow the below priority.

1. EPF (Employee provident fund) and PPF (Public provident fund).
2. Long term insurance policies.
3. Buying a second home.
4. Investing in a business which has less risk.
5. Investing time for kids to teach academics and manners. Yes, it is the biggest investment which helps for both you and your kids. How does it work? Please don’t see it from a commercial angle however, if you don’t raise them in right direction, your wealth can’t be managed the way you want. Never ever miss this logic. Have a detailed analysis you will get shocked with the outcome — The basic of life 🙂

To me investing in gold is blocking money, of course, buy jewelry to wear. If you want to consider it as a pure investment better buy raw rather than jewelry because exchanging jewelry often will minimize the returns on it.

The real wealth can be created with planning, decision making, analysis, and relationships along with currency.

Narasimha Mohan.

Which layer should start first? It is purely personal. You are the better planner for your wealth.

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