Lot of otherwise very smart individuals think that you can only make real money if you come from wealth. Not only does that run counter to the American Dream, it’s simply not true. Anyone can build substantial, actual wealth. Here are top ways you can get started right now.
Spend Less Than You Make
Creating wealth begins by spending less than you make.
That may sound too simple to be true, but if you only follow one financial rule, let it be this one.
When you spend less than you earn, you have money left over to invest. Investing your money is a great way to build wealth. If you don’t know how much you spend, create a very simple budget.
Just write down what you earn and then list out your expenses (rent, car, insurance, groceries, etc.). What you have leftover is yours to grow.
Take Advantage of Your 401K Match
The Department of Labor reports nearly half of Americans don’t contribute to their 401(k) plans. If that’s you and your employer offers a match, you’re giving up free money.
Saving for retirement can be painful, but starting early is the best gift you can give yourself. Time is an important factor in appreciation. Believe it or not, that extra $50 or $100 out of each paycheck does make a difference in having the kind of retirement you want.
Automate Your Saving
Life is busy and it’s easy to forget saving. Automation is your friend! Most banks let you establish regular transfers to a savings account. Many employers let you do this as well.
Think of it as paying yourself first. You’re your most valuable asset, so why not do it? If you really want to increase your interest though, consider an online institution like CIT Bank. They pay super competitive rates that often handily beat what’s available at your local bank.
Grow Your Skills
For many their day job is the best way to earn an income. Don’t limit yourself. Look for ways to grow your skills.
This can include things like volunteering for new tasks at work, or taking a course on a skill you want to learn. Don’t hide your new found skills either. Communicate them to your boss. If it doesn’t get you a promotion, you look stronger as a candidate in another role.
Regularly Ask For Raises
Don’t be a stranger with your boss. Be persistent about asking for raises at least once a year. Approach it with information to improve your chances.
Your boss knows the cost of living is up. Instead, show them where you’ve improved and how it has benefitted the company. Don’t badger them, but state your argument. If you don’t ask, you’re less likely to receive a raise. Bonus points for saving or investing the raise.
Diversify Your Investing
Investing in the stock market is a fantastic way to build wealth, especially if you like dividend-paying stocks. However, it’s not the only option available.
Crowdfunding has lowered the barrier of entry to invest in real estate, business ownership, investing in art, and much more. Diversifying your investments shields you when times are bad for one investment and gives you one more stream of income.
Create Streams of Passive Income
Studies reveal the average millionaire has at least seven streams of income. You obviously can’t work seven jobs, but there are limitless opportunities to earn mailbox money.
Another term for mailbox money is passive income. These opportunities require minimal effort and create multiple avenues to bring in income. Crowdfunding simplifies this endeavor. For maximum results, reinvest earnings to snowball your efforts.
Increase Your Savings
You should save at least 15 percent of your income to be financially stable. But, you shouldn’t stop there. A wise practice is to increase your savings by one percent every year to amplify your efforts.
What if you can’t afford to do that? Try saving half of your raise instead. Apply the funds to what you need to attack most. This can include anything from growing your emergency fund to increasing your retirement investing. Find what will serve you best and attack it.
Have Measurable Goals
Goals are the roadmap of your life. Studies show millionaires often have concrete goals they want to achieve. That doesn’t guarantee success, but you’re far better off with a goal than without one.
Don’t just set it and forget it either. Regularly revisit your goal to see if it needs altered or if you’re on track to achieve it. Most importantly, personalize it. You care much more about a goal you set than one given to you by someone else.
Avoid Debt at All Costs
High-interest debt is the enemy of wealth creation. It obligates your resources to someone else instead of to your own desires and needs.
Living within your means is the first goal. If you have high-interest debt, look for ways to intensify your payments. You can consolidate the debt to a lower interest rate, with a balance transfer card, or use tools like the debt snowball or avalanche to kill the debt.
Start an Emergency Fund
Debt is the enemy of wealth creation. Having a fully-funded emergency fund is the best way to avoid going into debt.
The savings provide a safety net for when life happens. Whether it’s a pricey car repair, or you need to replace a major appliance, your emergency fund helps you avoid needing to pay for it with a credit card.
How to Become Rich Quickly
Everyone wants to become rich quickly. While not always possible, there are legitimate ways to become wealthy. Follow these methods and you’ll be on the road to riches.
Signs You’re Financially Stable
Financial stability is the foundation to achieving financial freedom. Learn how financially stable you are and where you can improve.
How to Start Investing With $500 or Less
You don’t need a lot of money to start investing. It’s possible to start with several hundred dollars, or less. Take advantage of time and start growing your money as soon as possible.
How to Multiply Your Money
Get-rich-schemes are typically scams. However, there are ways to truly grow your wealth. While not flashy, they can help you build real wealth.
7 Ways to Make Mailbox Money
Mailbox money is a lot like passive income. You only need a little money to start to receive checks in your mailbox. Pursue these options to grow real wealth.
I’m John Schmoll, a former stockbroker, MBA-grad, published finance writer, and founder of Frugal Rules.
As a veteran of the financial services industry, I’ve worked as a mutual fund administrator, banker, and stockbroker and was Series 7 and 63-licensed, but I left all that behind in 2012 to help people learn how to manage their money.
My goal is to help you gain the knowledge you need to become financially independent with personally-tested financial tools and money-saving solutions.