Smart First Steps to Build Wealth
“Hard choices, easy life. Easy choices, hard life.”
(Jerzey Gregorek)
With planning and self-discipline, you can build wealth.
Building wealth is critically important, in order to live comfortably at every stage in your life.
It’ll more than likely be a slow start, because you have to put the work in, then have patience to see results. However, it’s more than worth it once you start to see the fruits of your labor! Here, we’ll talk about building wealth from the ground up.
Contents
Leverage
Before you even attempt to build wealth, learn how to manage your money. If you can’t manage your money effectively, it won’t matter what you do, because you’ll be wasting money on things that don’t matter.
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Hear this: people can end up broke- no matter how much they earn- if they don’t know how to manage their money. This is how celebrities end up blowing all of their cash and going bankrupt, and how lottery winners have no money left after a year.
You should know how much money you have coming in and how much is going out, as well as reasonable budget. Get yourself into a healthy money mindset and you’ll thank yourself later.
Great Examples
You’ll probably find it helpful if you look at some of the wealthiest people out there and figure out how they got to where they are.
They no doubt had their money mindset in place – then what did they do? Warren Buffett, for instance, is so rich because he avoided get rich quick schemes and instead played the long game by saving and investing. Make it your goal to learn as much about these people as possible, even what rulers of the UAE are worth and how they make their money.
Understand how successful people build wealth, and use that knowledge to become like them.
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Filling the Bucket
You fill the wealth bucket by making smart investing decisions, but first you need a savings account.
You should be looking into investing, once you’ve paid off any debts and saved up an emergency fund. With an emergency fund, you’ll never have to use credit, and you have the peace of mind that a sum of money can provide.
3 months living expenses is the minimum you should have saved up. Learn as much as you can about investing and take things slow. Remember, the sooner you start, the sooner you can start taking advantage of compounding. Simply working 9-5 and saving your cash will not help you to build wealth. Saved money will depreciate over time.
Action Steps To Consider
- Create a budget, even if that budget is simply on notebook paper
- Separate your expenses between fixed and variable, and take a hard look at your variable spending
- Take steps to cut your variable expenses each month and put the amount you save into a separate savings account
- Use a budgeting app to monitor your spending
- Save 5% of your gross monthly income
Get Help
Very few people actually do this kind of thing alone. Speaking to a financial planner or some kind of mentor can help you to get out of your own head and see what needs to be done to reach your goals. A financial planner will be able to explain investing to you and answer any other questions you may have.
Start as early on as you can and you’ll benefit. If you don’t start now, you’ll wish you had in a year!
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
Co-Founder: accountinged.com
(email) ken@stltest.net
(website and blog) https://www.accountingaccidentally.com/
(you tube channel) kenboydstl