A new year has now begun and many are thinking about their finances. In particular, there are those who would like to see increase your assets net or even get rich. After all, getting rich will allow you not only to have more financial security but also to have more options. And of course, you would have the option to spend on more things you want.
“Being rich means having freedom of time and place, to do the things that matter to you, ”said Andrew Lokenauth, CEO of Fluent who believes that wealth comes first from being frugal. Many millionaires are rich because they know how to keep and invest their money – and not spend it on useless things ”.
Beyond the frugalityKyle Kroeger, a finance expert at The Impact Investor, defines wealthy “someone (who) has earned enough regularly to be away from problems like paying their fixed expenses like rent, electricity and other utilities, maintenance costs. car, health insurance and education costs. “
The problem with the idea of becoming “rich”, however, is that it takes a lot of time and effort. Unless you’re born into a rich family and get a big one inheritanceyou are likely to get rich combining hard work and financial diligence. In fact, there are probably no secrets to getting rich. Some experts polled by GOBankingRates have outlined some of the best ways to get rich relatively quickly.
Avoid (and pay off debt)
Debt isn’t necessarily bad in all cases, but it’s something to avoid most of the time. For example, personal loans can be beneficial if the principal and interest rate are not excessive. Matt Dixon, RFC partner and financial advisor at TruNorth Advisors pointed out that “If you’re looking to get rich, stop having so many debts with credit cards (…) This doesn’t mean you should never use a credit card, but make sure you use it responsibly and make your monthly payments ”.
Spend intentionally and minimize costs
If you want to get rich, that’s important minimize costs and be more precise with your expenses. Spending intentionally and minimizing costs will require you to keep a budget. By doing this, you will be able to keep track of exactly how much you spend and where you spend it. The expert’s advice is to keep an expense checklist. “Develop a priority checklist of how you will spend your paychecks when you receive them. This includes money dedicated to debt relief, savings, entertainment, emergencies, etc.
The goal should be to minimize costs so that you can use that money to build wealth. Jeff Burrow, president and lead advisor of Sierra Ocean, said you should “find ways to limit your lifestyle costs and save 25% of your income.”
Invest as much as possible in a diversified portfolio
If you want to get rich, you should invest as much as possible – there is no cap on that amount, experts say. There are many different investment strategies, but most experts recommend putting the most money into the stock market. Some recommend a smaller portion of real estate or even speculative investments. Burrow recommends a portfolio of 65% equities, 25% real estate, 10% speculative assets of your choice.
Work on your career to get rich
There is no substitute for a high income but there is only room to cut back on expenses, but there is no limit to how much your income can increase, at least in theory. “Make sure that, as you progress in your career / business / main occupation, you always save more than you spend as you earn and increase your income.”
Find an extra job
The idea of a chore isn’t new, but if you have extra time and can find something to do for a few hours a week, it can be a powerful way to increase your income. Gig economy jobs like Uber and TaskRabbit make it easy to find flexible jobs.