Most of us believe that we need to get rich before we find financial happiness. At a certain level, this is true. You need money in order to meet your most basic needs. That is just how our consumerist society operates. To get products that will make our life comfortable, we need to pay for it. Because of that, you know that money will be a constant part of your success.
In fact, USNews.com discussed how 4 out of 10 Americans planned to manage their money better in 2015. This was based on a survey done by Allianz Life back in November 2014. Among the things that people would like to do is to pay off their credit card debt and increase their retirement and emergency funds. Their financial welfare is important to them.
5 acts you cannot delay if you want to gain wealth
If you want to get rich, you need to start working on it right now. Delaying your plans will not do you any good. The longer you wait, the more money is lost to you. So to keep that from happening, here are 5 tasks that you need to take care of right away.
Know what you want to happen.
The best way to do this is to come up with a financial plan. According to the data from IQuantifi.com, only 20% of Millennials have plans to help them reach their financial goals. 7 out of 10 create goals – but very few has an actual plan to make them happen. If you want to achieve something, it is very important that you set up a plan to get there. Start by thinking about asking yourself what would it take to consider yourself rich? Will it be based on an amount or a standard of living? Once you have identified that, you can continue to map out how you intend to get there. Will you set aside a specific amount each month to reach your goal? What tasks should you accomplish and when should they be completed? These are some of the questions that you need to answer in order to create a financial plan that will help you get rich.
Find your strengths.
The next task that you need to do is to look for your strengths. You need to find something that you can capitalize on. It may be a skill that you have or even an asset that you own. You want to use something that you are good at because it will increase the chances that you will excel in what you are capitalizing on. Obviously, you want to invest your money on something that you can profit from. So play to your strengths so it is a sure win for you. If it is a hobby that you can turn into a part time business, then you can really benefit from that added income.
Identify your tools.
The other task that you can start doing is to identify the tools that you can work with. If you have a savings account, you can use that to invest and start benefiting from compound interest. You can even look around your house. Do you have a spare room that you can rent out so you can earn more money? Or maybe you can turn your garage or basement and have it leased? Any income that you can make on the side can give you that extra money that you can use to invest.
Calculate how much you can invest.
Believe it or not, investing is one of the effective ways that you can gain financial independence. If you want to get rich, you need to think about compound interest. Take note that it is alright if you have to start small. That will grow in time. A lot of people put off investing because they think that they do not have enough money to start with. Well here’s the truth – you do not need a lot of money. As long as you can meet the minimum amount that is required to open an account in either a mutual fund company or any brokerage firm, you can start investing. Some accounts only require $100 to start with. Even if you earn the minimum wage, surely you can save this amount to start investing. When your initial investment starts earning, you can invest that profit again – thus increasing the money that you have in your account.
Put your debts under control.
Lastly, you want to work on putting your debts under control. This may not be something that you can accomplish overnight but it is important that you start doing something about it today. The money that you pay for the interest of your loan is wasted. Instead of using it to get rich, you are giving it to your creditors to make them rich. The interest in your debt is usually bigger than that of your savings. That means you can save a lot more by putting your extra money towards your debt payments. Once you have gotten rid of your debt, you can free up more money to invest.
Take note that most of the tasks that you will be working on right now is in preparation for the investments that you will make. To get rich, you need to learn how to invest. This is the most proactive way that you can grow your money – at least big enough that you can consider yourself wealthy.
How to keep your financial success from running dry
Take note that getting rich is not just about having a lot of money. Arriving at your target amount is not enough. You need to learn how to manage the money that you just amassed. That is very important. If you fail to learn how to do this, you can use up your wealth pretty fast and end up back where you started.
The sad truth is, people often fail to keep themselves rich because they do not know how to handle their finances. Believe it or not, there are Americans earning $75,000 a year and still end up living from paycheck to paycheck. This is according to the article published on CNN.com. Do you know what was revealed as one of the reasons why those earning a lot still live from paycheck to paycheck? It was because they were eating out too much! Households also admit that they spend a lot on lifestyle purchases. These are purchases that they can live without. If they choose not to spend on these, they can save a huge amount from their budget.
If you come to think of it, getting rich depends on the type of lifestyle that you choose to live. Here are a couple of tips that will help you keep your money after you get rich.
- Be careful in upgrading your lifestyle. If you lived for years without a luxury car, you can certainly live the next few years without one. Do not upgrade your lifestyle if it is just to show off how much you have. It is okay to reward yourself and make your life more comfortable. But if you can find another use for your money, then just opt to save it instead of spending it.
- Keep using a budget plan. Regardless of how much money you are worth, budgeting will always be a financial activity that you need to do. This will help you understand how much money is coming in and how much you can afford to spend each month. It will give you an idea on how you should use your money.
- Use debt wisely. It is understandable that you will need to use credit every now and then. If you have to buy a house or something expensive, using credit can be acceptable. Just make sure that this is a debt that will put more money into your pocket – instead of just robbing you because of the high interest rate.
- Monitor your credit. Another task that you need to work on is credit monitoring. Even if you are making all the right financial choices, if you fail to notice that you are a victim of identity theft, you could end up in a bad debt situation. To guard your accounts from identity theft, you need to constantly check your credit report.
These are only some of the things that you need to do in order to keep your money after you get rich. Of course, part of that is to never stop pursuing more wealth – at least, to a point where you are not too greedy. You need to learn how to enjoy your money too. Just make sure it is done in moderation. Here is a video from CBS Boston that features Tom Corley, the author of Rich Habits – a book he wrote after observing the habits of real life wealthy people. Get some tips by watching this video.