Moneycontrol
Last Updated : Jan 08, 2013 11:57 AM IST | Source: Moneycontrol.com

3 ways to become richer than your banker or broker

More often than not, it is our bankers and brokers who are getting richer, while we struggle to make both ends meet. It is high time we turn the tables on them. It is time we- who do all the hard work and take all the risk- are suitably rewarded.


More often than not, it is our bankers and brokers who are getting richer, while we struggle to make both ends meet. It is high time we turn the tables on them. It is time we- who do all the hard work and take all the risk- are suitably rewarded.


This is possible. It can be done by you, me and every other ordinary mortal (the so-called 'aam-aadmi').


And the best part – the icing on the cake – is that it is good for our financial health too.


So don't wait. Begin now.


1. Do not trade often
One source of income for these financial firms is the brokerage they earn on the trades they execute for us. So just stop trading too often. Less trades means less brokerage. Less brokerage means less money supply to these firms.


Moreover doing less number of trades is good for you too. Investing in stocks should be a long-term exercise. Day-to-day trading is akin to gambling; it is definitely not investing. Trading only makes the brokers rich — that too at your expense. The right approach is to buy good businesses and keep them for long term. By doing this ‘you’ will become millionaires, not your agents.


2. Do not borrow
Earning interest and other fees by lending money is another source of income for the financial firms/banks. So just curtail your borrowing. Less borrowing means interest. Less interest means less money supply to these firms.


Moreover less borrowing is good for you too. Financial prudence demands that we should save a portion of our income for the future. By borrowing we are doing exactly the opposite…we are consuming tomorrow’s unearned and uncertain income today. Spend only what you have already earned and resort to borrowing only in exceptional circumstances.


3. Do not use credit card
Credit cards carry obscene and uxorious charges. These charges are the third major source of income for the financial firms/banks. Less credit card usage means less charges. Less charges means less money supply to these firms.


Moreover less usage of credit cards is good for you too. Credit cards often lead to splurging and wasteful expenditure. By using less of credit cards, you will automatically cut down both the wasteful expenses and burden of the heavy charges. This will make you financially healthy and fit.


Do all this and you can be sure that these financial kings will soon be paupers – not you.


Do all this and you can be sure that these financial kings will soon be on the streets – not you.

Sanjay Matai is a personal finance advisor, author and online financial trainer. There’s a lot more free stuff to read on his blog thewealtharchitects.blogspot.in).

First Published on Jan 8, 2013 11:45 am
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