5 Known Mysteries To Building Wealth
Most already know how to build wealth, but here’s a refresher
Live Off Less Than You Earn
Spending less than you earn is the most crucial way to build wealth.
If you earn $10,000 a month, live off less than that.
The less you can spend, the better.
The more significant the gap between earning and spending, the faster you expedite wealth-building.
I always ensure that I spend less than I earn every month. I’ve kept up this practice 90–99% of the time.
About 50% of my income goes to investing, and I’m consistently reviewing my monthly budget to learn what else to cancel to keep more income.
If you earn x, you don’t have to spend x.
Invest Your Wealth
If you’re not investing your wealth, you’re burning your wealth.
There is no way to build wealth by saving and hoping.
Checking and savings accounts don’t offer competitive interest rates.
Pouring all your money into a home doesn’t necessarily build wealth.
Sitting cash is burning cash.
Put your money to work. Even if you only invest $20 a month, start with something, or you’re willingly choosing to opt out of wealth building.
Who doesn’t want to be wealthy?
If you didn’t raise your hand, invest.
Financial Education
Books are magical. Through books, you can change your entire life.
Every time I read a book, I become different because I leave with more knowledge and tools than before diving into the book.
The only way I’ve been able to shift my financial situation is through financial education, and the easiest way I’ve acquired that knowledge is through books.
Maybe for you, it’s watching YouTube videos or listening to podcasts on personal finance. For some of you, it might equate to attending a seminar.
It doesn’t matter how you learn as long as you learn.
Be sure that who you learn from is giving quality and reliable information.
Continuously Increase Your Income
Some people say as long as you live below your income, you will build wealth. Though this is true, if you want to expedite the wealth-building process, consistently increasing your income will do just this.
Inflation averages anywhere from 3–4% per year.
To beat this rate and build wealth, aim to increase your yearly income by double this rate or at least increase your income by the yearly inflation rate.
Two Last Things:
Increase your income streams.
2. Increase your passive income so you don’t have to work your whole life.
Apply A Minimalist Mentality
The less you desire, the more freedom you have — especially financially.
Unfortunately, most of the things we consume aren’t free. You have to pay for it. But that’s not a problem if you can afford it. Still, if you can afford things, it doesn’t mean you should buy them.
There are necessities, and there are non-essentials. We all need essentials such as food, basic clothing, and a roof over our heads. But after that, everything else is a want. Though there is nothing wrong with wanting a fancy home, fancy clothes, and fancy foods, question these desires.
What matters is spending your money where you find the most bliss and peace.
It is a pointless pursuit to make purchases of things without intention.
Americans tend to be hoarders, upgraders, and over-consumers.
What we buy isn’t the problem; it’s the lack of intention behind our purchases.
If you’re not into clothes, don’t waste your money here because you can or because society stresses fashion sense.
Spend your money where it matters most to you.
For example, I care more about travel than the clothes I wear. I care more about having a decent phone versus upgrading my phone every year just because I can. (BTW: Skip the phone upgrade if you can’t upgrade without paying the total price in cash).
You don’t have to be a minimalist, but there are some pros to implementing some minimalistic habits, including:
Living with less stuff.
Making more intentional purchases.
Never waste money on storage since you own less.
What is the financial benefit of implementing minimalism?
Since you’re spending less, you create the opportunity for financial freedom and the opportunity to build wealth faster.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.