It’s important to start building wealth right now. Many people wait until they have the six-figure salary, or the dream house before they start building their wealth. But if you wait to start acquiring wealth until you have it, you could end up failing to build any at all.
Take the case of JP Morgan. Until he started investing in his future and managing his money well, he didn’t even have a six-figure salary. Yet because he created a plan and started investing, he ended up becoming the CEO of the world’s largest financial firm.
Step 1: Choose your target
wealth A millionaire is someone who can live the lifestyle that they want, on an annual budget of $1 million. This means that the person has no debt and can comfortably put away 6% of their income in the bank. In case you are wondering why 6%, well it is because that is the return that is predicted for the stock market.
Step 2: Get a job
Although this may go against some of your beliefs, you need to get a job if you want to become a millionaire. This doesn’t mean that you should choose the biggest pay cheque.
If you work hard and play your cards right, there is no reason why an entry-level job at Home Depot or Wal-Mart can’t turn into one at Starbucks or Chipotle as time goes on.
Step 3: Invest wisely
Now we come to what really makes a person rich, their investments. Your investments should be spread across different asset types, with each type being used for a specific purpose.
In order to become a millionaire, you need to begin investing from when you are young. Your first investment should be in your home; buying a house will provide the nest egg that is needed to build your wealth.
Your second investment would be in stocks, and should ideally be invested in index funds (which track the entire market for you) as well as ETFs (exchange-traded funds).
Index funds are basically stocks that track the market as a whole, which will help you to avoid getting hurt if any company does poorly.
The third investment would be in mutual funds, which pool your money with lots of others, thus allowing you to have a diversified portfolio.
Step 4: Cut the fat
If you are living beyond your means and spending too much on luxuries then it is time to cut the fat. Most people spend more than they earn and end up facing debt problems down the road.
Start by making a list of all your monthly expenses, and then try to reduce your spending by at least 10%.
To be able to afford what you want, you will also need to be earning more than your expenses. This can be done by increasing your income and/or cutting back on your expenses. Just remember to keep a close eye on your investments and make sure that they are matching your increasing income.
Step 5: Put it all together
In order to have a secure life for yourself and your family, it is important that you use some of the wealth that you have built up. You can do this by saving 10% of your income, or by investing the rest.
One thing that you should not do, is to spend everything you make. If you want to save up some money, then buy a second home, car or pay for a vacation at least once a year. This will help you to have more money at your disposal and thus be able to create more wealth in the future.
The other way of building wealth is by setting it aside for rainy days. Money can be saved and then invested on a regular basis, but this means that you will not have much when you actually need it. The better thing to do is to put your money where it generates more interest than in the bank, and then invest in a way that will help you make even more money on top of this.
Step 6: Enjoy life
Now that you are able to live the lifestyle that you want, it is time to take a bit of time out every now and again. Watching your wealth grow is actually the best thing that you can do. By watching your wealth grow, you will be able to plan for the future and help your family out as well.
As time goes on, you can repeat these steps, as they will continue to help you build wealth. If you want to do this then it is essential that you start investing when you are young.
Step 7: Repeat the cycle
If done correctly, this process will enable people to live a life of comfort and ease. By following this process on a regular basis, more money will be added every month than was added in the previous one. It is important to keep this cycle going in order not to fall behind.
In the end, it will be your wealth that will determine how comfortable and rich you can be. This is something that you should never forget. So many people fall into the trap of wanting more and more money, often at all costs.
My Verdict = End Game
If you want to live a life of comfort in the future then it is essential that you start building your wealth now, while you are young. There are so many different paths to wealth and it can be difficult to figure out which ones you should take.
A lot of people ask me what my definition of a wealthy person is. I consider a wealthy person to be someone who can live comfortably on $1 million per year with no debt and save at least 10% of their income.
Thanks for again reading .. Cheers!!!!