People have a common perception that you need to be wealthy to start investing in the stock market. But during the discussion about 6 myths about the stock market, we have stated that you can make an investment with just Rs. 500/-. In this column, we will discuss how small sacrifices in luxury can give you a better future. Generally, owing to the lack of financial knowledge most of the people spend lavishly according to his/her income. From starting up in the morning to going to bed, a person does various activities. These activities or acts affect not only the present but also the future. There many acts that can be sacrificed or given up. So, friends lets discuss how to get rich by small sacrifices which will affect not only present but also the future,

Skipping at least 2-weekend dinners in a month

There are many families who go out for dining every weekend. If you have such kind of habit you can skip at least two-weekend dinners in a month. You can go out for dinner at alternate weekends. Suppose you are a bank employee having holidays on 2nd and 4th Saturday of a month. You can dine out in 2nd and 4th weekends.

We assume your family consists of four members including self, spouse, and two children. Usually, the cost of every weekend dinner is around Rs. 1000/- per week.

Assuming 4 weekends in a month you approximately spend Rs. 1000×4 = Rs. 4000/- by dining out each weekend.

If you dine out for 2 weekends in a month then your cost is = Rs. 1000×2 = Rs. 2000.

So, by skipping two-weekend dinners you can save around = Rs. 2000/-.

If you invest this Rs. 2000/- per month in any equity-oriented mutual fund you will get around Rs. 55 lakh after 25 years assuming 15% CAGR.

Use a bike or Public transport instead of 4 wheeler car

Suppose, the distance between your house and your workplace is 10 km approximately. So, every day you have to make a two and fro journey of total 20 km. If you go alone to your office then you can use a bike or public transport instead of a four-wheeler car. Let’s make it clear with an example.

The to and fro journey between your home and workplace is 20 km.

An average 4 wheeler car gives a mileage of 8 km per litre petrol.

So you need to buy a petrol of = 20 km / 8 = around 2 litres.

Your approximate consumption of petrol or diesel for a month is = 2 litre × 30 days = 60 litre.

So, your total cost for a month= 60 litre × Rs. 80 = Rs. 4800/-.

Now in the case of a bike,

An average bike gives a mileage of 30 km per litre petrol.

Total distance covered by a bike = 20 km × 30 days = 600 km.

Your approximate consumption of petrol or diesel for a month is = 600 km / 30 km = 20 litre.

So, your total cost will be = 20 litre × Rs. 80 = Rs. 1600/-.

Your total savings is = 4800-1600 = Rs. 3200/-

If you invest this Rs. 3200/- per month in any equity oriented mutual fund you will get around Rs. 1 Crore after 25 years assuming 15% CAGR.

Again, whenever you go for a holiday or nearby tour, just try to make the journey by train instead of a four-wheeler car. This will save a lot for you.

Quit smoking and alcohol

Many people have a common perception that term insurance plans are not worth buying as they don’t provide any monetary benefit on survival. It is a proven fact that nicotine causes cancer, but due to bad habit people cannot skip the habit. If you are a habitual smoker or consume alcohol you actually not only destroy your health but a lot of money in smoking.

Suppose you take 2 cigarettes in a day. One cigarette costs almost Rs. 7.5/-, then you spend = 15 × 30 = Rs. 450 in a month. If you invest this Rs. 450/- per month in any equity oriented mutual fund you will get around Rs. 12 lakh after 25 years assuming 15% CAGR.

Get rid of junk foods and soda or soft drinks

We all are aware of the fact that consumption of junk foods like pizza, burger, fast foods or street foods easily available in the market and soft drinks not only increases obesity, cholesterol etc. but also increase diabetes and other incurable diseases. But due to habit whenever people go outside, they consume junk foods which cost higher. If you come out the habit of consuming these junk foods and drinks, you will save a lot to secure your future.

Get rid of spending on sale

Shopping malls or shops, as well as online e-commerce companies, offer different discounts or cash back offers time to time, especially on occasions like Diwali, Durgapuja, Holi, New Year, Christmas etc. Many persons get tempted to these lucrative offer policies and buy such products, though they do not need them. These items remain unused, but a sufficient amount is spent or wasted. In a whole calendar year, all these unnecessary shopping amounts to a big spending. Obviously, you will have to bear the burden. You as a smart person should avoid such kind of act and save & invest the money.

Exchange of Smartphone

A new fashion of exchange Smartphone has become very popular among people, particularly among the youths. It is seen that a person exchanges his/her Smartphone in every two or three years and sometimes after one year. This exchange takes place due to many reasons. Sometimes old one hangs or does not work properly. There are new and updated versions of Smartphone launched in every month and easily available in the market. But the main reason is that people get bored with their Smartphone very quickly.

When the updated version of Smartphone with more features and facilities are launched in the market, people get tempted to these new ones. Some people have a nature to show off their luxury. So, boastfully they exchange their Smartphone. But changing Smartphone frequently is not a financially wise decision. Now let’s discuss what the financial impact is when you exchange your Smartphone in regular interval of 2 years or less and how the exchange of Smartphone makes you poor.

For Example,

Suppose, you buy a new Smartphone costing Rs. 20000/-. Then after two years, you decide to exchange the Smartphone with a new one. You pay Rs. 15000/- more to get the new Smartphone. So, your cost of exchange of the Smartphone once in two years for the period of ten years amounts to Rs. 15000 * 5 = Rs. 75000/-. While, if you use a Smartphone with proper caution and manner it will definitely last for 10 or more years. If you invest the money instead of the exchange of Smartphone you may get Rs. 2 lakh rupees after 10 years assuming 20% CAGR.

If you have any questions regarding how to get rich by small sacrifices feel free to comment so that we have a discussion and if you found this post helpful please share with your loved ones.