Ray Dalio, one of the prominent names in finance, is the founder of Bridgewater Associates, the largest hedge fund in the world, managing $160 billion in assets. He was asked what advice he would give young investors, and below is a summary of the three major points he made. This advice can be used in any country.

1. PRIORITIZE SAVINGS
Saving is a very important habit to develop, as it can be the difference between becoming financially secure and living in penury. We all know why it is important to save, however practising it, in reality, is a different ball game. There are critical questions you will have to ask yourself to ensure you save properly and put yourself on the path of financial freedom:

-- How much do I spend each month?
-- How much do I have saved?
-- How many months will I be okay with the savings if I stop earning?

The important thing is for you to observe your spending patterns, calculate, cut down unnecessary expenses and be very meticulous about the whole process because savings is freedom and security. In addition, we have to be cautious about debt. Debt for consumption is bad; however, debt for productive use is better, because it produces forced savings which is good.

2. LEARN TO SAVE WELL
Savings is the first part of the game. The next step is to determine how to save well.

What should I put savings into? You should understand that cash is the worst investment over a period of time, so you judge that by looking at rate of inflation in relation to the after-tax income you will earn. If inflation rate in the country grows at an average of 11% and you are earning 4 or 5% on your savings in a bank or somewhere else, then your money will be worth less and less, as you are shortchanging yourself.

To overcome impact of inflation on the value of your money, you have to move into assets that will do better than inflation over a long time. You will have to do this by diversifying your savings and investing in different countries and asset classes.

Picking the right country to invest in is a big deal and may require expert advice so you don’t become susceptible to a total loss of funds because some countries carry political risks. There are various types of asset classes and you will have to choose the right balance between variable income instruments and fixed income instruments.

3. DON'T FOLLOW THE CROWD.
Herd mentality is real, and no matter how knowledgeable you are, it is always difficult to go against the crowd. However, in investing, the crowd is seldom right so you have to buy some assets when no one is buying or sell when no one is selling.

Finally, you should be aware that you will encounter losses along the way, as the value of your investments will fluctuate over time; however, the key is to have the emotional stability to be prepared to be in the game for the long haul, as the best returns in investing come from compounding.

SOURCE (abridged): https://nairametrics.com/2019/08/20/a-billionaire-recommends-3-strategies-to-create-wealth/

Good one OP