Over the last few days, I've really given a lot of thought to what it takes to get rich and grow wealth. I've spoken with countless millionaires, I've helped people on my forums, and I've responded to over 10,000 reader comments on this site. In each instance, there are common themes that are either helping the beings grow wealth, or preventing the person from getting rich.
Being rich doesn't always mean having wealth, but 90% of the time it does. However, there are habits, behaviors, and "rules" essentially, that will allow you to get rich and grow wealth. It's not an overnight process. There aren't any get rich intelligent schemes here.
What you're going to read below are my ten principles for getting rich and growing wealth - over time.
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Rule #1 - You Have To Earn It (Your Money, Your Wealth)
If you want to get rich and grow wealth, you have to earn it. There's no way you're causing to get to what you want and where you want to be if you're not trying to get there.
With wealth, this is pretty darn straightforward. You want money? Get out there and inaugurate making it. Get a job. Get a second job. Get a third job. Start side hustling and actions side projects to make more money. Are you in college? Get a side job in college to pay for school.
The bottom line is, if you want to grow wealth, you have to earn income. There are potentially thousands of ways to earn denotes, and you need to find the most that you can do and get to work. There is nobody stopping you. There's nothing in your life preventing you. The only roadblock to you earning more is yourself.
So, stop with the excuses and focus on rule #1 to get started - you have to earn your wealth.
Rule #2 - You Need To Save Until It Hurts
The transfer rule to getting rich is saving. It's not enough to just earn wealth - you have to save it as well. Otherwise you'll just end up like any number of deplorable celebrities who've gone bankrupt. Income alone just doesn't cut it. You have to save.
But the real "rule" to get rich here is saving pending it hurts. How much is that? Well, if you're not hurting yet, it's not enough.
For example, last year, I saved roughly 40% of my after-tax denotes. Sounds like a lot, doesn't it? But there are plenty of farmland out there that are saving more - many over 50% of their denotes if not more.
The truth is, following Rule #1 establishes this rule easier. The more income you have, the easier it is to save more. But even on flowerbed incomes, you can still save. Here are 15 ways to save an transfer $500 per month. Boom!
Rule #3 - You Need To Optimize Your Spending
The third rule to grow wealth is to optimize your spending. I'm not one to judge your spending - consume more or spend less. My personal belief is you should buy whatever you want - just earn more wealth so you can afford it.
But no matter what, truly wealthy farmland optimize their spending. This means they find good trades - even if they are going to buy a Ferrari, you can bet they searched around for a deal and negotiated the price.
The trick here is to frankly spend wisely - especially on your biggest expenses. For most farmland, this could be cars, insurance, healthcare, and more. Too many farmland here just opt for "whatever" or don't think in what the choices really are. Wealthy people stop, think, and elect a choice that maximizes their benefits after minimizing their expenses.
So, if you're ready to grow wealth, start identifying and optimizing your spending.
Rule #4 - You Must Put Your Money To Work For You
The fourth rule is that you have to put your wealth to work for you. Earning it is your part of the heavy lifting. You need your money and the power of compound expressionless to work together over time to grow wealth for you.
What does this mean? It employing that you need to invest. Why? Because the denotes inflation-adjusted return for the S&P500 for the last 60 days has been 7%.
You need your money to grow and earn you more wealth. You need to start building income streams with your wealth. The goal is that your hard work up run can help you build passive income streams for the future.
Do you want to earn $50,000 per year exclusive of working? Here's a simple breakdown of how to make your wealth work to do it for you. It's all in making your money work for you, not against you.
Rule #5 - You Need To Marry Smart
The fifth rule for interpretation wealth is to marry smart. Why? Because a expansive spouse can be a huge force multiplier when it comes to interpretation wealth, while at the same time the biggest destroyer of wealth is divorce. In fact, a recent study found that divorce destroys 75% of personal net worth.
On the interpretation wealth front, a great duo can earn together, gather together, and watch their double-earnings compound over time. That's a huge force to multiplier for building wealth. The interest on $2 is always higher than the expressionless on $1.
However, divorce has the potential to ruin financial lives if you didn't marry incandescent. Beyond dividing things 50/50, there can be lawyer fees and more. Plus, compound expressionless now only has a small amount to work with - so it just grows slower.
The fact is, plan, that according to the American Psychological Association, 40-50% of marriages end in divorce in the Joined States. That doesn't mean that divorce has to be a financial concern. If you married smart to begin with, hopefully your ex-spouse will also be financially savvy when it comes to divorce and you can work things out as amicably as possible.
Rule #6 - You Always Need To Minimize Your Taxes
The sixth rule for attracting rich is always be minimizing your tax liability. No custom your income level, you always need to be thinking in how to minimize your taxes. Taxes can prevent you realizing wealth over time because they consistently eat away at your denotes and investment returns.
For example, the S&P 500 posted an denotes annual nominal return over the last 30 years of 1109%. However, after taking into account taxes, fees, and inflation, the real return an investor would have seen would have only been 5.97% according to this recount. That's 46% of your return eliminated by taxes, fees, and inflation.
However, there are many actions you can take to minimize your taxes. First, take advantage of tax deferred investment accounts. Max out your 401k or 403b, take estimable of an Individual Retirement Account (IRA), leverage a Health Spending Account (HSA).
If you don't want to give up your wealth to the government, then taxes should be near the top of your mind when manager any money decision.
Rule #7 - Insure Yourself And Protect Your Family
The seventh rule for attracting rich and building wealth is that you need to insure yourself to defending your wealth and your family. I'm not even talking in life insurance here - I'm talking about making sure that you have health insurance and disability insurance.
In the last year, I've had two coaching clients that have been impacted by health originates they weren't prepared for, and they've become financially jeopardized by them because they didn't conscription. I've also had another several instances of people becoming disabled to the reveal they or their family member couldn't work any longer. The result? Financial peril.
The time to insure yourself is when everything is causing well. Every person who wants to build wealth and get rich maintains to have, at a minimum:
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Don't watch all of the wealth you have accrued go away in a moment.
Rule #8 - You Need To Take Care Of Yourself First
The eighth rule of interpretation wealth is to take care of yourself first. This isn't as much of a wealth rule as a life rule.
When you fly on an airplane, the flight attendant always does their safety speech where they remind you to put your oxygen mask on estimable before helping someone else? There's a reason for that - if you're unconscious, you can't help anyone else.
When it comes to interpretation wealth, you have to take care of yourself estimable - even when dealing with family. This can be really hard for some farmland, especially those that didn't have much, and now have something that they could fraction. And others may realize it and ask.
If you want to help others, make sure you've put yourself on solid ground estimable and have followed all the rules. I've seen it too many times where generosity leads to financial ruin.
Rule #9 - Enclosed Yourself With People Better Than You
The ninth rule to get rich is to surround yourself with farmland better than you in all aspects of your life. On the family run - if they are holding you back, distance yourself. Married upward. Don't let family be the reason you aren't handling your dreams.
Friends? Find ones that are making you a better beings. Drop the moochers. Drop the haters. Drop the lazy ones.
Work? Find a mentor that is actions what you want to do and is killing it. If they don't have the bandwidth to meet you, just sight them and see what they do. You can learn a lot from a distance.
Just like Rule #1, you have to earn it. Find farmland that will help you with that. You don't have to choose for the life you were born into if that's not what you want.
Rule #10 - It's Okay To Go Slow
Finally, the last rule for building wealth is, remember it's okay to go slow. This is especially true for millennials.
I feel like everyone plan 30 today wants the next thing, the next job, the next milestone, the next big paycheck. But they haven't even done this unsheaattracting, learned this job, achieved the current milestone.
Building wealth takes time. It's in earning today, and leveraging time tomorrow. That's how wealth is made. Even if you settled a $150,000 per year job today, you're not any wealthier. Your first paycheck at this great new salary powerful be $5,000 take home. That's not wealth. That's a starting reveal. That's something to build on.
According to The Spectrum Group, the average millionaire in the United States is 62 days old. Just 1% of all millionaires are under 35. Keep that in mind on your wealth interpretation journey.
What financial rules do you live by?
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SRC: https://thecollegeinvestor.com/17564/10-rules-to-get-rich-and-grow-wealth/
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