If you want to have a better performance than the crowd, you must do things differently from the crowd.
John Templeton

Think Big
Most of the people who have made it big could do so because they knew they could do it; they believed they could do it. Many of us refuse to tune to the right channel. We don’t dream ourselves wealthy; the obvious result is that we never grow rich because we never planned for it. You need to condition your mind into believing you are wealthy and successful. This is the precondition: unless you believe you can do it, you can’t do it.
If you are waiting for a lottery or a windfall, you are wasting your energies. Lottery creates riches sometimes, but it would be folly to wait for the heavens to select you from out of billions. And even if you are the lucky one, historical evidence proves that few who became rich by winning a lottery sustained the riches. It’s an unviable proposition: the probability of winning is bleak, and if you win, you may not keep that wealth for long since you have not trained your mind in the art of making and keeping wealth.

Set Your Goals
A fool and his money are soon parted because a fool does not define his goals. Unless you define where you want to go, you will never reach it. This is very important. Set your goals. You need to create your own mission statement and then, based on such a statement, define your goals, both long term, and short term. Your goals should be quantifiable. ‘I want to be rich’ is not a defined goal. (Doesn’t everyone want to be rich?) ‘I want to have a net worth of ₹1 million by the age of 30’ is a goal.
While the former is just a wish, the latter put a quantified value to it, and you can measure your performance as you move towards achieving your goal. The best way to define and quantify your goal is to write it down. Write it down clearly and unambiguously as if you are writing work specifications.
Set the goal that will make you exert yourself. If you set your target too low, it will fail to be an effective motivation. Your goal should cause a little discomfort, a little stress, which produces positive results. It should be realistic, though it must be set a notch higher than your present capability. Setting a goal that is far too unrealistic will defeat the purpose. If you are setting an impossible goal, you are likely to throw it out the window sooner than later.

Read and Reread Your Goals Periodically
Compare the actual results with the projected. See how you are faring. If you are performing better than expected, is it time to revise your targets upwards? If you are performing poorly, are things going fundamentally wrong, or do you need to lower your expectations?

Do Not Have Too Many Goals
Setting too many goals may confuse you, and you may lose focus. Goals may often contradict each other and may lead to dilemma situations. Keep them simple, keep them short, and keep them limited to the things you want.

Your Goal Should Be Measurable
You should be able to track and measure your progress. They should be tangible. You should be able to visualise them. If you can visualise something, the chances of success are higher. Abstract goals get lost in oblivion.

Find a Mentor
It is very important for you to associate yourself with people who are rich and successful. Being in the company of successful people will give you positive energy and the motivation to succeed. Surround yourself with people who are failures, and you are also likely to become one. Mix with successful people; it will provide you the micronutrients that will build your inner strength to succeed. ‘It’s better to hang out with people better than you. Pick out associates whose behaviour is better than yours, and you’ll drift in that direction,’ says Warren Buffett.
Why will someone agree to be your mentor? It is a lot easier than you imagine. You may find a mentor, and you may ask him you want to succeed and you want to emulate his ways. Many will oblige. In fact, you will be surprised to find how many people are eager to help. Few people come forward to ask for genuine guidance, so if asked, you are likely to get it with pleasure. I have mentored many, and I know mentoring gives as much satisfaction to the mentor as it gives to the mentee.
If you cannot find an ‘active mentor’, you can find a ‘passive mentor’, a successful person you follow without that person knowing or caring about it. This way you can get free mentoring from some of the most successful people in the world.
In the Hindu epic Mahabharata, Ekalavya is a young prince of the Nishadha tribes and a member of a low caste. He aspires to study archery in the gurukul of Dronacharya. After being rejected by Dronacharya, Ekalavya embarks upon a programme of self-study in the presence of a clay image of Dronacharya. He becomes the best archer in the world, with his skill far superior that of Arjuna, Dronacharya’s favourite and most accomplished pupil.
Read biographies of successful people like Buffett and Gates. Read everything about them; find out the principles from their lives you can emulate. How about writing an email to a successful person, appreciating his work? Genuine admiration is bound to be appreciated.
Do not despise rich and wealthy men. Some people hold strong negative notions about wealth and find fault with the man who has made it big. The successful man is considered a product of luck, fortune, or ill-gotten wealth. It need not be so in a majority of cases. Stop fretting and fuming about wealth and appreciate the success of people who have made it. Take pleasure in the success of others, appreciate it, and tell them you like it. Genuine approbations never go waste.
Surround yourself with successful people. Remember, you are the average of five people who spend the most time with you. Join clubs, associations, chambers of commerce, and other bodies where you are likely to come across successful people.
Don’t let people around you divert you from your goals. Stay away from negative influences. There will be many people around you who will discourage you, laugh at you, and try to convince you that what you are up to is impossible to achieve. They will try to drag you down to their own level of perfunctory performance. Please stay away from naysayers and doubting Thomases.

Know How to Manage Your Money
The skill of managing your money is equally important, if not more important than earning it. ‘The art is not in making money but in keeping it’ (Chinese proverb). Create wealth consciousness. Fortunes have been withered away because people failed to manage their money well. Rich people don’t have a higher IQ than poor people; they are just good in the art of managing money.
You may argue, how could you manage your money when you don’t have any? Don’t put the cart before the horse. The money management skills must be learnt before you earn big money, not after that. When you have less money, you can experiment more, or you can try different rules—not so when the kitty is big. It is like learning to swim in the toddlers’ pool before you try your swimming skills in the ocean. The ocean is unforgiving; the little pool is forgiving and friendly. Managing your money is more important than the amount of money being managed.

Record Your Transactions
If you want to be a successful investor, it is imperative that you keep a meticulous record of your transactions. You don’t have to be an accountant to know how to maintain accounts. You can create a simple spreadsheet with receipts in one column and payments in another. You can find software like QuickBooks or Peachtree to do it for you. Those who hate the electronic world might maintain a simple diary to record their financial transactions. A crash course in basic accounting is desirable, though not a precondition, to maintaining your accounts. If Warren Buffett, with billions of dollars of wealth that he manages, still handles his own accounts, can’t we take the lead?
Double-entry bookkeeping is a wonderful system of keeping accounts; it was invented in the fifteenth century by Luca Pacioli. A double-entry bookkeeping system is a set of rules for recording financial information in a financial accounting system in which every transaction or event changes at least two different nominal ledger accounts.
Financial information used to be recorded in books (hence bookkeeping), whereas now it’s recorded mainly in computer systems. These books were called ledgers, and each transaction was recorded twice (hence, double-entry), with the two transactions being called a debit and a credit.
The accounting equation serves as an error detection system: if at any point, the sum of debits does not equal the corresponding sum of credits, an error has occurred. It follows that the sum of debits and credits must be zero. The system is self-balancing and is like a modern management information system in that the ‘trial balance’ is thrown out of balance if you do not record the double effects of a transaction.
While accounting is seemingly a mundane task, knowledge of accounting will stand you in good stead in your pursuit of wealth.

Pay Yourself First
Many people know this simple trick, but few practise it. You earn and you pay others until nothing is left for yourself. And you postpone your share to the next cycle. In the next cycle, there are more dues to be paid. This goes on and on. The stage when you have enough surpluses to pay yourself first will seldom arise. Parkinson’s second law, ‘Expenditures rise to meet income’, keeps operating against you.
The best solution is to pay a ‘salary’ to yourself every month. This has to be set aside first before you pay others. You may think this may not work for you since your spending always exceeds your inflows. Prioritisation of resources is a matter of attitude and habit. You must start learning to prioritise when the resources are less, not when you have an abundance of resources. You can make money, or you can make excuses, but you cannot make both.

“Never Spend Your Money Before You Have It” (Thomas Jefferson)
Generation Z, so appropriately called digital natives, takes pride in living on borrowed money. Plastic money has created havoc. Credit card companies will make the spending power available at your doorstep even if you don’t need it. It will entice you to spend, spend, spend, spend without even owning money. We are a part of a massive consumption-oriented economy, where success is measured in terms of how much you spend rather than how much you earn. The result is obvious: we recently saw the unprecedented sub-prime crisis in the West, which threatened to kill the financial system of the entire world.
Spending money before earning is like counting your chickens before they hatch. What if they don’t hatch? You start creating a bubble, thinking that the future is rosy and bright. But things seldom work out the way you think they will. The bubble grows bigger and bigger, and you start borrowing in order to service the past debts. The situation worsens when your borrowing is spent in paying off the interest of earlier loans. You cannot afford to do so for long unless you are a government! Charles Dickens puts it so effectively in David Copperfield: ‘Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.’
The only reason a great many people don’t own an elephant is that they have never been offered an elephant for ₹1,000 down and easy weekly payments.
If you want to be rich, take a vow: ‘Thou shall live within thy means.’ Come what may. This is a sine qua non. Ignore the future. A more conservative and desirable stand is to keep in mind all future expenditure but not to consider future income unless it comes into your bank account. Do not borrow. Not that rich people don’t borrow. Borrowed money does give leverage, but you will be better off not borrowing. Borrowing in any form is ruled out. No overdrafts, no credit card borrowings, no leveraged trading, no futures and options, no intraday trading.

Be Fully Committed to Creating Wealth
Everyone wants to be rich, but very few make it. There is a big difference between wish and commitment. Being rich requires a definite commitment, a pledge, a vow, a promise to yourself that you shall be rich, that you shall remain focused to your goal of creating wealth, and that no matter what your present station in life is, you shall attain a comfortable position. This dedication is necessary. Wealth is created in your mind first, and the material wealth follows.

Use Your Internal GPS System
Define your goals, lay down the road map, and keep driving towards your destination, mile after mile, never losing focus. If you have a clearly defined plan imprinted in your mind and a strong commitment to the fulfilment of the plan, the internal GPS system takes over and drives you to the destination, undeterred by diversions and speed breakers. If you keep reminding yourself of your goals constantly and develop a habit of not deviating from it, you set in motion the internal autopilot. You just watch things happen on their own, with no efforts on your part!

Let Your Money Work Hard for You
Most people work hard for the money. Smart people make money work hard for them. If you work hard for money, there is a limit to which you can go. The limit is defined by your intellectual ability, your courage, your competence, and a host of other factors. But when you let your money work for you, you make your money make more money for you. And more money makes still more money. And so on. It breeds like rabbits and keeps breeding at a fast pace. Set aside as much money as you can so that it can be your rabbit farm—a small rabbit farm initially and will eventually grow exponentially. You can sit, relax, and enjoy the fruits of success. This game is better than FarmVille since you breed actual rabbits and not the ‘e-rabbits’ that FarmVille produces.
If you invest your money wisely in the stock market, you are actually participating in the dynamic economy. You are part owner of a business that works 24/7, creating wealth for all owners like you. The money works when you are sleeping or playing golf or are on a long vacation to the Far East. Its work is not related to your mood, nor does it stop working for you when you are sick. Compare this to the money that you earn by expending your own labour. The quantum of money you can earn is limited by many obvious factors.

Do Not Panic
Have courage and belief in your own self and in your investment methodology. Things are likely to go wrong. That should not deter you. If you do your homework well, an adverse situation can be turned into an opportunity. When investing in the market, things do go crazy. Mr Market behaves irrationally quite frequently, and irrational exuberance is often a rule rather than an exception. It requires wisdom to understand the market and courage to face the adversity. Be greedy when others are fearful and fearful when others are greedy. Remember this success mantra; it will always help you when you face the rough weather.
The strategy explained here is defensive. The author knows well that if things can go wrong, they will.

Just Do It!
The time to act is now. Buckle up and get going. Money has a time value. If you start earning, saving, and investing early, you have already doubled your money before your friend even started investing. Procrastination is the thief of time, and time is money.
(Dr. Tejinder Singh Rawal is the author of the best-selling book Loads of Money: Guide to Intelligent Stock Market Investing: Common Sense Strategies for Wealth Creation)