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Hi Millennial! Here are 3 Ways to Become a Twisted Tajir

Jakarta, CNBC Indonesia – Building wealth is such a compelling topic that it may lead to heated debate, promote unique ‘get rich quick’ schemes, or encourage people to enter into deals they may not have considered.

But are these three simple steps a misleading concept? Of course not

But while the basic steps to building wealth are easy to understand, they are much more difficult for most first-time people to follow.


Basically, to accumulate wealth over time, you need to do three things, as quoted from investopedia:

1. Make Money

This step may seem simple, but for those who are just starting out, it is the most basic step to start building wealth. To get money, of course we only assume that ‘if you want to get money, then work’.

There are two types of income that a person will get, namely active income, where when the person works, he will definitely get a salary, while passive income is obtained from a side job from the worker, either through opening a business, or otherwise.

However, not a few people in Indonesia only rely on their active income, which is the salary they get after working for 8 hours a day. But not a few are also able to not rely solely on salary.

If you can ‘make money’ through passive income, it means you already have funds backup if at any time your active income is not enough to meet your needs.

2. Save Your Money

Your income is sufficient, your daily needs are also met, but you can’t save money? Here are the ways

  • Manage your monthly withdrawals

To help you manage your monthly expenses, you can help with a financial management application. Make sure to categorize funds for emergencies, funds for daily needs, or others, don’t mix these categories up. After sorting out the funds, then the remaining funds can be saved

  • Prioritize Liabilities over Desires

You can also separate the musts or obligations with your desires. Activities that are very important must take precedence over your desires, such as the need for a house to take precedence over buying a car.

When you want to buy items that are not very important, you should first hold on to that desire, it is better if the funds are saved, so that if your long-term savings already have benefits, then you fulfill that desire.

  • Adjust your needs to your abilities.

Like from point 2, arrange your needs according to your financial ability, don’t depend on debt, because if you are very dependent on debt, then you have to prepare funds back to pay off the debt.

3. Invest Your Money

After we earn income, and also sort out the expenses, but you invest all the funds into savings? You are wrong.

Saving is indeed important, because in addition to the long term, it can also be an emergency fund if at any time something unwanted happens.

However, if we only rely on saving, then from time to time the value of these savings will decrease, due to administrative fees that will be charged each month and also because the exchange rate tends to fluctuate.

Therefore, we should sort again and set aside our income to invest in other instruments, such as mutual fund stocks, or bonds.

In investing, of course we know the term ‘high risk-high return’, which means the higher the level returnit is, the greater the risk we will get.

This cannot be separated from investing in risky instruments such as stocks and bonds. So how do you do so that when we invest in stocks can minimize risk, by doing diversification, both stock diversification and investment diversification.

  • Stock Portfolio Diversification

One of the risks if you only have one stock in the same sector is that if the stock goes down, it can have a big impact on the overall rate of return.

This is called unsystematic risk or business risk. It is possible that a company-specific problem such as poor management, lawsuits or other matters may cause the share price to permanently drop.

The good news is that you can minimize this risk by owning more than just one stock. This can be called diversification.

When you diversify by owning a large number of stocks, the overall performance of the portfolio will only be minimally affected by a few underperformers.

For many novice investors, this shortcut is a huge advantage over buying and researching stocks in just one sector.

However, it also doesn’t make the risks that will happen just disappear. Besides you owning at least two or three different stocks, the shares of companies in different sectors can also affect the performance of your stock portfolio.

For example, if the three shares that you own are in the property sector during the corona virus pandemic (Covid-19), then maybe the risk will come, and it will affect the performance of your portfolio.

So if you want the risks that will occur to be minimized again, then besides you have several shares in different companies, you should also, these stocks also have different business sectors.

For example, if you have one share in the property sector, then the other shares must be in the unaffected sector pandemic, such as in the consumer goods sector, telecommunications or in the pharmaceutical sector.

In addition to stock diversification, the need to invest in other than stock instruments should also be considered in order to minimize the risks that might occur.

This can be done with investment diversification, meaning that if you want your risk to be minimized, you can invest in instruments other than stocks, such as bonds or gold.

Investing in gold is indeed promising, because its value will continue to rise, even though the price of gold also sometimes fluctuates.

For example, during a pandemic, gold is considered the safest safe haven, because instruments other than gold have an impact on the pandemic, even though the price of gold is currently ‘sinking’ due to the news of the Covid-19 vaccine.

[Gambas:Video CNBC]

(chd / chd)


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