Full disclosure – I am not a financial advisor or investment professional, I am only sharing what I have learned through my own experiences.
I’ve been on a journey to learn about wealth and how to build it and keep it. I have heard that it can be easy to get rich and even easier to lose it all, so my goal has been to learn about how to grow wealth and manage your money.
No matter what amount you make or how much debt you have if you implement these strategies you should be able to get ahead of your finances.
1.Pay Yourself First
The first thing you need to build your wealth is to pay yourself first. You should always have a portion of your check going to a separate bank account that is saving money for a rainy day. You should not be paying yourself last after you pay all of your bills and expenses. Your long term wealth should be put first and you should be adjusting your expenses accordingly.
2. Don’t Save Your Money, Invest Your Money
This is going to sounds counterintuitive to everything you have heard, and it should. Do not put your money in a bank account and try to save it, accumulating less than one percent per year. What you want to do is invest your money. You should be investing your money into a mutual fund or ETF, something that guarantees returns over time.
3. Live Within Your Means
The other way to work on building your wealth and keeping it over time is to live below your means. You should know what you can afford and live below that line. This is a very simple concept but can be hard to execute.
You should be careful of the little things that accumulate over time. My personal things are vices are Bob’s Donuts and books. If you’re going to have a vice you may as well make it apart of your personal development!
4. Understand Your Assets and Liabilities
You need to understand your assets and liabilities. To keep it simple, assets are things that generate income or appreciate over time, and liabilities are things that cost money or depreciate over time.
Depending on your income and what you can afford, homes and cars are viewed as liabilities over time due to real estate tax, constant maintenance and depreciation of value over time. Assets and liabilities can be a sticky subject depending on how you think about them. The point is to think about where your money is going.
Leave a comment below to share how you invest your wealth and what assets you prefer to buy!