You Don’t Have to Be Born Into Money To Become Wealthy: 4 Steps You Can Take Right Now To Become Rich
Unlike the likes of President Donald Trump had money handed to him by his tycoon father, most of us have to work hard to get to first class status in the economy sphere. We have to start from scratch and build wealth like Bill Gates did start a company from his parent’s garage.
The path to riches for most millionaires and even billionaires in the world is riddled with complications, roadblocks, and unique sets of circumstances all of which we must overcome. Making smart decisions with the money you currently have is the fastest way to stack up to the money in your bank account. Here’s how you can become wealthy in a hurry.
Start With High-Interest Loans’
While it might be tempting to pay off your low-interest loans because they are easy to pay off, work hard towards paying off the high-interest loans first. High-interest loans are sink holes that suck money right out of your pocket. They make it hard for you to make new investments because you are forever playing catch up to keep up with the high interests. Also, by paying the high-interest loans first, you’ll find it a lot easier to pay off the low-interest loans. In fact, by the time you’re getting to the low-interest loans, you’ll be able to put enough money aside to start investing.
Spend Less than You Make
Some people spend money as fast as they make it. It’s not that they don’t know they are doing it, in fact, most people have a pretty firm grasp of their monthly expenses, but they end up spending way above what they are making. You need to be disciplined to lower your spending so that it is less than your income. By lowering your spending, you have enough left over to save, pay your bills and live, to some extent, comfortably.
One way you can make sure you spend less than you make is having a monthly plan. Your plan should include essentials like rent, food, transport, debt obligations, and other expenses you cannot do without. Always make sure you’re within your monthly spending expenses. Furthermore, your monthly budget should also factor how much you want to save every month. Including savings as part of your monthly expenses is an excellent way of making sure you put something away each month.
You never know what will happen tomorrow. During the economic downturn of 2008, many people lost their jobs, homes and their lifestyles. They didn’t have enough tucked away to see them through the hard times, and they paid the price. Be smart and have three to six months worth of expenses in your savings account. That’s your contingency plan should anything happened to your regular income. Take a leaf from small business owners. Before getting into the business, most small business owners accumulate a liquidity cushion that supports them until the business gains traction.
Developing a saving habit requires a lot of willpower and commitment. Saving several pennies out of every dollar you make is easier said than done. However, if you know your monthly expenses, and you are willing to forego some of life’s pleasures, you can accumulate a lot of money in your savings account.
Diversify your income by owning investments. Working hard doesn’t cut it anymore if you want to become wealthy. Instead, you want to become an owner of something, like a stock portfolio. That said, make sure you invest in something that continually appreciates in value and keeps a close eye on it.
Also, you shouldn’t own an investment for the sake of owning one. Vet every investment before you put your money into it. You don’t want to get into a risky investment that might set you back considerably because of its volatility. Consult a stock broker, or a mentor before making an investment.
To recap, building your wealth might not be easy. However, by cutting down your expenses, paying off your debts, investing and saving, you’ll be on track to living the life of the rich and wealthy. When you are starting out, make sure you have a six months contingency plan that allows you to get by without a source of income, should something happen.
You need more than just hard work to become wealthy. You have to build a nest of eggs by owning multiple investiments that gain more value over time. At the same time, you must make sure your investments are sensible. That means you should not be drawn to risky investments because they can destroy your wealth overnight.
While the jury is still out on whether President Trump was lucky to be born with a silver spoon in his mouth, the door is open wide for anyone who wants to join the rich club.