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Do you think that earning more is the best way to increase your net worth? That is not entirely true. In fact, it is not the only way that you can become rich. There are many ways that you can grow your household wealth. It is best for you to know your options when it comes to growing your finances so you can choose the one that fits your personality well.
Believe it or not, building your wealth is not something that happens overnight. It also involves a lot of hard work, determination, patience, discipline, and commitment. This is why you have to choose a strategy that you can stick to. Otherwise, your efforts might be wasted if you decide to quit in the middle of your plans.
One thing is for sure, it is not impossible to increase your net worth even in the midst of tough economic times.
According to an article published on Fool.com, the most recent survey revealed that the top 10 % of Americans have a median net worth of $1.87 million. They also have an average net worth of $4.03 million.
The truth is, most of these people are self-made millionaires. These are the people who were not born rich. They had to work their way up the ladder of financial success. This is the reason why you should never think that being wealthy is not for you. It does not matter if you are young or old. It also does not matter if you have limited resources. It is possible to increase your net worth and you do not even have to work longer hours to make it happen.
3 obvious techniques to increase your wealth
The truth is, there are so many ways to build up your wealth. However, there are only three (that we currently know of) that will help you do so without having to earn more money.
There is nothing wrong with earning more money. In fact, it will make your wealth building opportunities limitless. As long as you are willing to work hard, you can grow your net worth. Although that is true, it can be tiring. Imagine having to work longer hours each day just so you can earn more? Even if you set up a passive form of income, you need to work hard to make sure it earns you an income.
If you do not like this extra work, here are three ways that you can increase your net worth without necessarily pressuring yourself to earn more.
Live a frugal life.
If you do not want to earn, then just cut back on spending. You do not have to increase your income if the current one is able to provide you with everything that you need. You just have to analyze what you really need to spend on and concentrate on that. According to an article published on WSJ.com, “The Millionaire Next Door” are those who live in modest homes and drive second hand yet sturdy vehicles. They lower their living costs so they can save more money from their paycheck. This is what enables them to grow their extra money so they can use it to build their wealth. If you live a frugal life, it does not mean you are depriving yourself. You are actually focusing on the necessary expenses so you can free more money for the things that will help you improve your financial position. Not only that, in case something happens to your current income and it goes down, you do not have to worry because you are used to living on a low budget anyway.
Do something about your debts
Another way that you can increase your net worth without earning more is by paying off your debts. The interest rate of debts is higher than a savings account. If you have the extra money, it might be better to pay off your high-interest debts. You are wasting a lot of money if you stretch your payment period. If there is no prepayment penalty, you should pay as much as you can each month. Paying off your credit accounts aggressively will allow you to be free of this financial obligation. Once a debt is paid off, you can use the freed money to grow your finances.
Invest your money
Finally, you need to think about investing your money so it can work for you. Technically, this should not be part of this list because it earns you money. After all, we are listing different ways you can increase your wealth without earning more. However, this may be an exception because you do not have to do much to make your money grow – at least if you know how to invest properly. This is one of the passive income generators that will not require you to work longer hours. As long as you have the extra money to invest, you can grow your personal wealth even as you take care of other tasks. You just have to know where to invest your money. If you can take the time to learn it, this can be a great money making machine for you.
Secret to building wealth
The truth is, the real secret to building wealth is not saving, investing, budgeting, or smart spending. All of them are important but that is not where you should focus on. In the end, your attitude towards money is the secret to becoming rich. If you have to focus on one thing, make sure you have the right attitude when it comes to money. You may be exerting a lot of effort to save and budget your money but if you have the wrong attitude towards it, you may find yourself struggling to stick to your financial habits.
According to an article published on Forbes.com, there is one study that revealed a relationship between the attitude of a person and their financial success. The study titled Journal of Personality and Social Psychology revealed that economic success is more likely to happen if you are not cynical. In fact, after 9 years, cynical participants earned less money than those who possess a more positive attitude. This is why you have to seriously consider how you will change your attitude so you can increase your net worth successfully.
Here are some tips to help you change your attitude towards money.
- Change your mindset. Start by changing how you view money. Think about it as a tool. It should not rule your life and it should not define it either. Although we want to increase our wealth, it should never define our success. When you stop focusing on the amount, you will find it easier to come up with a strategy to increase your personal finances.
- Control your finances. Another thing that you need to keep in mind is that you should be the one controlling your finances, not the other way around. Your finances should not dictate how you live your life. For instance, your debt should not keep you from resigning from a very stressful job. You should set up your life and financial habits in such a way that will give you the freedom to do anything with your life without worrying about what will happen to your money. This will only happen if you get your personal finances under control.
- Identify the mistakes of the past. In case you have debts or other financial issues, make sure you understand what got you into these tough financial situations. Once you identify the mistakes, it should be easier to avoid them so you will no longer land in the same situation again.
- Know the habits you should develop. As you are identifying the mistakes to avoid, it is also very important to know the habits that you need to develop. You need to have the right habits because it will allow you to increase your net worth easily. Habits are something that comes naturally. These habits can help you make the right choices about your money.
- Surround yourself with people who have the right attitude about money. Finally, you have to get to know people who have the attitude or financial goals that you want to emulate. By surrounding yourself with these people, you can follow what they are doing and possibly come get some sound advice from them.
Here is a simple video with clear and concrete tips about how you can develop a mindset that can help increase your net worth.
