Drop Your Living Expenses Like Crazy
One of the best ways to become wealthy is to save money. Saving money is easy enough, but saving money right away may not be the most practical thing to do. It takes discipline, time, and sacrifice.
So the first step in saving money is to buy fewer things, and then to buy them later.
Young people have a bad habit of buying things now that they can’t really afford just because it’s within their budget.
But credit cards and young people don’t mix.
Buying things you can’t afford is a quick route to credit card debt and debt in general. Credit card debt is very easy to get in, but very hard to get out of. It’s about as hard as getting out of a deal with a devil.
Save on Vehicles
If you spend a lot of time in a car, figure out how you can use a smaller one than you “need.” Maybe it’s sharing a ride to work with someone in your household, or maybe it’s renting a car when you need to do a big shopping trip or go on a vacation. Cutting down on your vehicle expenses won’t happen with a quick and easy fix, but it could be worthwhile to keep this in mind when you make a longer-term goal (like a child going off to college).
The strategy can work for more than cars. It’s fairly common for people to accidentally accumulate other things that they don’t need, like a lawn mower, tools in the garage, or a big television. Figure out a way to share one of those things or switch down to a smaller one, and you could reap some real savings down the road.
Save on Shelter
Much like you can save on taxes by owning a home instead of renting, you can also save money by “home-ing” instead of “rent-ing.” “Home-ing” involves renting somewhere in a great location, buying a cheaper house in a less desirable location, or buying a small apartment instead of a single-family home.
The goal here is to keep your housing costs as low as possible because it’s one of the biggest costs you’ll face.
Another great money saver is to use the cloud for all your needs, both personal and business.
Don’t Buy Crap
According to the JP Morgan Chase Total Net Worth survey, just 9% of Americans say they have increased their net worth in the past year. Three quarters of those surveyed reported that their net worth had stayed the same, and 3% reported a decrease in net worth.
For the average person this means staying the same or having a negative net worth. There are two common reasons people have a negative net worth. First, the average person is in debt. They owe more money than they own. Second, they own a bunch of crap they don’t need. No matter how much money you make, if you don’t have savings, the only way to create wealth is to own assets. Assets appreciate over time and help you build wealth.
Save a Percentage of Your Income
It’s a well-known fact that saving makes you rich, but many people don’t realize how much compounding interest could save them. We’ve found that most people don’t start saving until their first job, or even until they get married or pregnant. If you start early, you will reap the rewards of saving more money over time.
Although saving can be planned per month or per fiscal year, the best strategy for most people is saving off of their next paycheck. This is a simple trick that allows you to delay gratification and start saving right away. For instance, if you get paid biweekly, take the difference between your weekly wage and your monthly salary and put it into savings. By doing this, you will continue to save and eventually begin saving 20% of your income. In terms of saving money, you are starting with a win instead of having to save a lot of money upfront.
The key is to automate the process and schedule your savings to go right from your paycheck into a high-interest savings account. You want to build up your savings in an easy, virtually effortless way.
Earn Much, Much More
I’ve been writing about personal finances for more than a decade. As a result, I’ve developed a reputation as one of the top experts in the field. Just search for my name in Google and you’ll see how many people know my work.
I’ve written several books on the subject as well, but you don’t have to read them. All you need to know is how I earn “ and how you can, too.
Here are the nine moneymaking strategies I use to excel in my professional life. They can be applied to improve your income, as well.
5. Work Hard Now
And Play Later “ One of the most common mistakes people make when they’re trying to grow their net worth is that they want it all now. They want to live on the beach in Maui, eating bon bons, and drinking piña coladas. But if you invest in a dream home or a fancy car or you want to travel around the world, you must have patience.
Invest in Your Education
Education doesn’t just increase your income potential, perhaps most importantly, an education helps you to be disciplined. Most people tend to waste money on non-essentials like cable TV and lattes, because they don’t understand the value of money. A good education helps provide a better understanding of how to use your income and how to manage your expenses. For instance, one of the biggest lies we all believe is that “payment due now” means “payment later is cheating.” We don’t think about the future and don’t anticipate the long term consequences.
Training and education teaches you the importance of delayed gratification. This helps bankroll you for wealth in the future.
Education may also lead to higher income, but it isn’t the only pathway to wealth. Education helps you understand the markets better and gives you a confidence that allows you to make smarter investment decisions.
Invest in Yourself and Your Marketing
“Invest in yourself.”
Why spend money on marketing if you’re not self-aware of what goals you have in your career? Why spend thousands of dollars on a new suit if you don’t know what qualities and skills you need to present to the world in order to land your next job opportunity?
You can invest in every so-called professional tip out there and will still be internally and externally naked if you’re not rooted in self-awareness.
Without a foundation of self-awareness, you won’t know whether a shiny object is worth investing your money in.
The bottom line: Your financial awareness should come before investing in yourself.
Invest in yourself first and save enough to afford your own marketing campaign. Then, invest wisely in your marketing.
Who knows, your marketing may just be advertising your ability to invest wisely in yourself.
Venture into Entrepreneurship
The very first thing you can do to build your own wealth, aside from getting that financial degree, is to become a business owner. More often than not, founders and owners of their own company are often the wealthiest people in their neighborhood … and it’s no wonder why.
The good thing about becoming a business owner is that it doesn’t necessarily require you have to have a gargantuan amount of money to start. Even if you only have a few hundred dollars, you can actually start a business – like a lemonade stand. But if you have a little bit of money to spare, you can start investing at a higher level. You can even start up a business in the corner of your own backyard … literally.
Whatever you want to do, you’ll need some amount of money to get started. But if you don’t have a lot of money, you can either buy a franchise or make something yourself. No matter what you choose, the important thing is to actually get started for it’s so much better to be a success in a small business that’s mine, than a failure in a big business that’s not mine.
Try Real Estate
Investing in rental properties has the potential to make you a lot of money if you have the right properties and systems in place. The key is to invest in areas that have high growth potential. Once you buy the property, you will be responsible for finding a reliable tenant and collecting rent on time.
Concluding Thoughts
We’ve covered everything from small daily habits that you can do now to start saving money to how to establish a “spend less” mentality so you can invest more wisely. We’ve talked about how to get a handle on your spending and have proceeded to give you 9 strategies to build wealth fast. Everything from timing the stock market to self-imposed isolation has been talked about.
When you’re just getting started on building a financial future for yourself, it can seem overwhelming and impossible. But it doesn’t have to be. There are lots of little things that you can do to make a big difference in your finances. Even small actions, when repeated over time, will help put you on the path to financial freedom.
And after all the research we’ve put into getting a hold of money and how it works, we can tell you with absolute certainty that it’s never too late to get started. The advice offered in this roundup is applicable for both young and old, regardless of your financial position. You can start saving and investing now.