What’s your dream retirement?
The average American hopes to stop working at 62. If you’re like most of them, you probably have big plans for your golden years. Travel adventures, a paid-for home, trips with the grand kids- the whole nine yards.
Contrary to popular belief, you don’t have to earn six figures to bring that vision to life. However, you must start living with this goal in mind. After all, investing is a lifelong process. The earlier you get started, the better off you’ll be.
Here’s How to Build Wealth in 10 Simple Steps
Building wealth is a topic that sparks heated debates among people. But is it too hard? The simple answer is no. Here are the ten keys to accumulating wealth over time.
- Get a Regular Source of Income
First things first: you’ll need to get a steady income. You cannot invest money without saving, and you can’t save money without a stable source of salary.
Sustainable wealth comes from creating value over time. That’s why you must find a well-paying job if you don’t have one, and keep your job if you do.
For small business owners, it’s crucial to focus on developing more long-term value. Try to establish a business model that can produce better, cheaper, and faster than other industry Goliaths. This way, you’re sure to grow over time.
- Have a Written Budget
There are no accidental millionaires. Most financially successful people do one thing religiously- plan for their money.
Sit down at the start of each month and give every dollar an assignment. More importantly, stick to the plan you create. The last thing you want is to overspend and end up with nothing in the bank.
In case you don’t know how to budget for yourself, talk to a wealth management services professional. Their expertise can be invaluable, especially if you are a high-net-worth individual.
From creating a comprehensive budget to implementing tax-efficient strategies and identifying lucrative investment opportunities, their assistance can help you make informed decisions and maximize your wealth potential.
It would, therefore, be wise to reach out to a wealth management professional at this company for managing your finances effectively and securing your financial future.
- Get Out of Debt
Your income is your most powerful wealth-building tool. But when you spend your whole life trying to repay loans and credit card bills, you end up with less money to stow away in your retirement fund.
Don’t try to invest and save up while you still owe money to others. It’s best to clear up all your debt before you think about accumulating wealth.
- Don’t Over Insure
Insurance should be one of the most vital items in your budget. Securing yourself and your assets keeps you from incurring massive losses in the event of a mishap.
At the minimum, you must have the following types of insurance.
- Home insurance
- Health insurance
- Auto insurance
- Life insurance
That said, be careful not to over insure or spend money on useless insurance products. Stick to the ones mentioned above unless there is a valid reason for you to get more.
However, if you want to secure your finances, especially when it comes to health expenses, you can also explore trauma insurance that can help to cover critical illnesses that may not be included in general health insurance. You can learn more about trauma insurance claims from Curo and other companies to get a better understanding of the medical conditions that are covered, payouts, and requirements to get the insurance.
- Curb Your Expenses
Ask any wealthy people, and the first thing they’ll confess to is living on less than they make. Regardless of what Hollywood tells you, the rich don’t splurge on lobster dinners and multiple Ferrari.
It’s simple: when you manage your expenses, you have more to save. If this isn’t the best way to build wealth, we don’t know what is.
- Invest, Invest, Invest
Let’s face it, you can’t make money while you sleep. But putting your money in the market means your money is working for you. In other words, you’re profiting off the labor of others. This is a surefire wealth-building tactic!
Funneling your money into a savings account is not an investment. Your money should be in profitable investments that get good returns at minimum risk.
Consider different possibilities and build contingencies for them – goal or objective-based investing. It is also wise to avoid investing all your money in one asset, so diversify your portfolio.
There are a multitude of assets to look at for the short term. Money market instruments can be very lucrative with the right application of financial knowledge and skills. You could also channel some of your savings into buying assets which can create a passive income for you.
For the long term, consider putting down your money on safe and strong assets, like real estate and gold. When you invest in houses, say from garmanbuilders.com, you could enjoy the advantage of flipping them, renting them out, or simply readying them for your retirement.
It is a commonly known fact that gold is known as “God’s currency” as it can safeguard you in times of financial crisis and potentially multiply in value. You could also plan a tax-saving retirement account with the help of a gold IRA.
It is important for first-time investors to have questions about how to put their savings into action. We suggest you consult an investment services firm to discover the best investment methods for you.
- Consider a Passive Income
By definition, passive income is any salary that does not require your continuous presence or labour, unlike your job or business. Back up your main income channel with passive income options, such as:
- Blogging
- Affiliate marketing
- Drop-shipping
- Selling digital products
A word of caution here. When exploring passive income options, steer clear of get-rich-quick proposals and Ponzi schemes. These plans are often illegal and can land you in trouble with the law.
- Seek Financial Education
You can’t protect your money if you don’t know anything about it. Hence, it’s essential to further your financial education before you step into this world.
Familiarize yourself with terms like income, expenses, financial independence, and return on investment, among others. Read books, take courses, and listen to podcasts. Financial education is a continuous activity, so keep studying as hard as you can.
- Create a Safety Net
Sure, you’ll always plan for your retirement or your child’s college. However, it isn’t enough. Set up an emergency fund for unexpected expenses like car repairs, appliance breakdowns, and home fixes. As you get older, make sure you consult with a trusted Estate Administration attorney to ensure your assets are protected and you have a clear, strong will drafted. You don’t want to risk something happening and your hard-earned wealth benefiting the taxman, not your family. Chip away a little from your budget every month to keep this fund afloat. Doing this will prevent you from destabilizing your budget when there’s a problem on the horizon.
- Revisit Your Retirement Fund Annually
While there’s nothing wrong with letting your retirement money sit quietly and enjoy the highs of the market, it’s probably best not to ignore it entirely. Considering the market’s gains and losses, your original asset allocation- how you’ve assigned money to different stocks and bonds- will change.
To reduce this risk, you need to re-balance your investments. There are plenty of ways to do this, which is why we suggest you talk to a wealth management services professional stat.
Infographic created by Goodnight Law, experienced estate planning attorney in OKC
The Bottom Line
Retirement is just around the corner, whether you’re ready or not. Hence, it only makes sense to prepare for it in advance. Remember, building wealth isn’t an overnight process. We hope you follow these steps to slowly but surely secure your golden years!
Author Bio: Sandy Funches is a freelance writer who enjoys writing. Writing is of utmost importance to her as doing so helps her educate people by spreading her knowledge.
