How to Get Rich and Retire Early - 3

‘How to Get Rich and Retire Early’ which is written by S. G. Raja Sekharan. Even though the title mentions retiring, it provides salaried persons with different investment options available for passive money streams so that they can enjoy wealth in their personal life and work with passion in their corporate professional life. Thank you, Mr. Puneet Arora sir, for suggesting reading this book. 

My takeaways from this book are: 

A wealthy person is one whose cash returns from Investments or passive income is equal to or more than the monthly expenses throughout his lifespan. Getting wealthy is a result of you clearly defining a WEALTH STATEMENT, making a FINANCIAL PLAN for getting rich, figuring out the INVESTMENT INSTRUMENTS (Equity, Debt, Commodity, Real estate) that suit you, implementing the plan, and finally reaching the destination. 

To become rich/wealthy you need to make a 20-year financial plan (logic is provided in the book), then look at the timeframe of break-even i.e., when your passive income (return on investments) is more than your monthly expenses. Whatever investment avenue you chose to use, you are trading off between three things. Risk (Safety of capital), Return (return on investment), Liquidity (length of time you need to keep the capital invested) 

The longer you stay invested, the lower the risks and the higher the returns. If you can stay invested for periods of less than two years – you must look at DEBT INSTRUMENTS. You can look at EQUITY and COMMODITY INSTRUMENTS for three to five years. REAL ESTATE and EQUITY INSTRUMENTS would be the recommended investment avenues for five years and above.