Decoding wealth
Wealth isn’t just about how much money you make. It’s about how much you keep and how you manage it. The person who earns ₹3 lakhs per year but only needs ₹2 lakhs to be happy is wealthier than someone making ₹10 lakhs but spending ₹20 lakhs. True wealth comes from living within your means, saving wisely, and managing expenses over time.
So, how can an average person build wealth? It starts with budgeting. Write down your income and expenses. Understand where your money is going every month. Then, set limits on unnecessary spending. Create a simple budget that ensures your essential expenses are covered, while still leaving room for savings. Even small amounts add up over time.
Saving is key. Set aside a portion of your income every month, no matter how small. It could be 10%, 15%, or even 20%. Open a recurring deposit or a savings account with higher interest rates. Automate your savings, so you don’t forget. The earlier you start, the more your money can grow through compound interest.
Managing expenses is another important step. Differentiate between your needs and wants. Do you really need that expensive dinner, or would a home-cooked meal do? These small decisions shape your financial future. You don’t have to cut out everything you enjoy, but be mindful of where your money is going.
Real-Life Example:
Take the example of Ramesh, a salaried employee from Pune earning ₹5 lakhs annually. He realized that despite his decent salary, he was living paycheck to paycheck. So, he sat down and reviewed his expenses. He found that a large portion of his income was going toward dining out and impulsive online shopping. Ramesh decided to make changes—he started cooking at home and set a monthly budget for shopping.
With these savings, Ramesh began putting ₹8,000 per month into a mutual fund. Over time, his small investments grew. After five years, he had saved more than ₹5 lakhs. By managing his expenses and sticking to a budget, Ramesh was able to build wealth slowly but steadily.
The key lesson? Live below your means, save consistently, and let your money grow over time. True wealth is not about how much you earn, but how you manage it. Even if your income isn’t high, smart budgeting and disciplined saving can set you on the path to financial independence. You don’t need to make lakhs to build wealth—you just need to manage your money wisely.
In the end, it’s not about working harder but working smarter with your finances. Start small, stay consistent, and let time do the rest.