How To Become Rich With Low Income or Money (Learn To Build Assets)

Recurring Deposit Account
Recurring Deposit Account

Becoming rich with little money or small income can be tough. It is tough only because you don’t know the process of smart asset building and money making formula. Process of asset building must start early in life. Throwing money here-and-there in the name of investing is not enough.

Building assets with low money need some “Smart Hard Work”. The days of “Hard Work” and “Smart Wok” are over, Now only people with ability of doing “Smart Hard Work”  can achieve success. How Build Assets with little money? It is essential to learn how to start building assets. Building asset is an art which everyone must master.

The question pops in my head is, What is right investing? how can you differentiate between right or wrong investing tricks?

here are people who invest money for capital appreciation. There are people who invest money to generate income. But accumulation of income generating assets can transform a person. For expert investors, this is good investing. Good investing (for many) is accumulation of income generating assets.

The Big Problem with investment mind set… People focused on quick money making are large in number where as people focusing on good assets accumulation are hard to find.

So how a regular common man can build right focus?

In order to do it, one must be ready take a LONGER ROUTE. Forget about investing, forget about assets, forget about money-making. First, learn what is financial independence.

The broader objective of investing should be achievement of financial independence in life.This will only happen if person accumulates income generating assets.

For most of us, quick money is more inviting. Isn’t it?But quick-money-making-people are those people who become slave of their jobs.This happens because they do not have a FINANCIAL BACK UP. They are too dependent on paycheque from their job.

Key to financial independence is PASSIVE INCOME. The higher will be the passive income the better.

How To Generate Passive Income?

Invest money intelligently & buy income generating assets. In turn, assets will generate passive income.People who are Rich has a portfolio FULL of income generating assets.

Rich people has a typical way of becoming wealthy. They use their regular income (from business, job) to buy assets.

Assets accumulated in this way generates passive income. It is not their income from business that makes them rich. It is their ever increasing passive income that keeps them richer.

We can use the same logic to become rich. Divert regular income to buy income generating assets.

Building assets
Building assets

How To Become Rich – Save Money #1

The first step of building asset is to save money.

Saving money is more important than investing itself. If we know the right tricks of saving money, our half job is done.

The easiest way to save money is to put aside part of income.Reducing needless spending will also increase free-cash in hand.

Save Money
Save Money

Even richest men in the world has to save money to stay rich.

As a rule of thumb, if one saves 25% of total income, it is called a decent saving. Give standing instruction to salary account to divert 25% money to saving account. This should happen on the first day every month.

Before spending even a single penny, 25% must vanish from the salary account. It should be as if it never existed.

This will be a good starting point to inculcate a good saving habits. If you are young and want to become rich by your 40s or 50s then its a good starting too. Any form of investing and money saving at early age is immaculate.

How To Become Rich – Open Recurring Deposit Account #2

When people start accumulating money and assets, their first investment is in equity market. But why go the regular way when you can make money by keeping your investment safe.

A new investor must start with a product like recurring deposit.

Recurring Deposit Account
Recurring Deposit Account

But when in the world recurring deposit became so important? They cannot even give large returns. But what recurring deposit does is to nurture a habit of investment.

Recurring deposit is a process of automatic investing. Here, without interventions of anyone money gets invested effectively.

But why to invest in recurring deposit when we have equity/stocks?

We must prevent ourselves from investing compulsively in equity. We must wait for the right opportunities to invest. Compulsive investing can never give best returns.

Recurring deposit (RD) restricts investors from doing loose investment.This money gets locked.

When opportunity comes (like stock market crash, gold price fall, new real estate project etc), Recurring deposit money is liquidated to buy undervalued securities (like stocks).

From financial point of view, Yes Recurring deposits are not your best shot. But when you start investing all you see is becoming rich overnight or quickly, which makes you more vulnerable towards loosing money.

The habit of investing on regular frequency is the key for having a stable apatite.

How To Become Rich – Invest In Mutual Funds As SIP #3

SIP in mutual funds is very useful tool for new investors to accumulate assets.

Starting a SIP has multiple benefits. New investor can get exposure to equity, debt, real estate sectors from a single window.

Sip - Systematic Investment Plan
Sip – Systematic Investment Plan

The best will be to start a SIP in dividend yielding mutual funds. Continue investing in mutual fund, through SIP’s. Keep contributing to SIP till eternity.

Initially, dividend yield from mutual funds will be pea-nuts. But after lapse of 3 odd years, this dividend income will start becoming noticeable.

SIP is a great way of assets accumulation. People with even zero investment knowledge can start a SIP.

SIP automates ones investing process.It is my personal favorite.All new investors should have at least one SIP in their investment portfolio.

How To Become Rich – Invest in Value Stocks #4

So how to identify value stock?

Value stocks are not available all the time.

When we are investing compulsively, we are only buying overvalued stocks. We must avoid purchase of overvalued stocks.

FinancialHub - Value Stocks
FinancialHub – Value Stocks

Do not just buy any stock. Buy only value stocks.

What are value stocks?

Value stocks are fundamentally strong stocks which are available at undervalued price.

Fundamentally strong stocks are rarely available at undervalued price levels. This is the hard part.

Overvalued stocks cannot be treated as assets.

Identification of value stocks can be done in two ways. (a) Wait for the market to collapse or (b) by learning stock valuation.

When stocks market crash, price of all stocks falls. This brings its price to undervalued levels.

Stock market crash is like value investors fantasy. This is the ideal time for bagging quality stocks.

It will be a pity if one does not have enough money to buy stocks in such moments. This is where the savings accumulated in Step-1& 2 will prove useful.

Value stocks bought at undervalued price levels yield outstanding dividend income.

Even capital appreciation of value stocks (bought during market crash) is fantastic.

But how to know which stocks is good quality and which stock is bad quality?

To make the job easy one must prepare their own list of good quality stocks.Generally we call these stocks as BLUE CHIP stocks.

How this list preparation will help…?

Such a list always remains in the pocket of investors. One fine day, when stock market crashes, this investors will not start searching for list of quality stocks. He will have his list ready.

How To Become Rich – Buy A House/Home #5

The real-estate will always boom no matter what. Till the time our population is not under control the price of commercial place or resident homes are goinng to raise the roof every year.

Buy A House
Buy A House

Why buying a home is good investment?

If you are leaving on a rent the process of buying a house is the first thing should be on your mind.

When you invest money in hard property they stay intact with it. They always have a return value. It is a kind of investment which will grow every year, beating the inflation.

The question pops in again, How to buy home with low income? 

Putting your money in house purchase should not be your first priority. But for sure it should be on your important investment bucket list.

But home only when you have created your passive income stream. Once you have done all the above 4 steps of asset building technique then only start looking for house.


How much money your earn is not the main problem of your financial situation. The problem is with your approach.

How to spend and invest that income is the key to financial independence. Learn to control your eagerness of spending money. The key to build asset and make money is – SAVE-INVEST-DIVERSIFY