When you’re thinking about building wealth, it can be valuable to look at the people who’ve done it well. Individuals who are already wealthy often know a thing or two about how to build real wealth, so what is it they do different that’s allowed them to flourish financially?
Don’t Spend Mindlessly
A few dollars here for a cup of coffee, a few extra meals out with friends, a quick Uber ride. Think that spending doesn’t matter? Based on the habits of the wealthy, that’s not the case. While splurging isn’t necessarily out of the question if you want to build your wealth, mindless spending is. Mindless spending is one of the primary ways people sabotage their financial goals, but it can also be easily remedied. Create a budget and stick with it. Using a mobile app like Mint is a realistic way to maintain your budget and see exactly where your money is going, which can help you make better decisions.
Diversify Your Investments
Very rarely are you going to find a successful, wealthy person who’s put their eggs in one basket. Instead, what you’ll more commonly find is that rich people have diversified their investments and created a portfolio that balances risk levels. For example, you may balance safe investments such as mutual funds or bonds with a slightly more bold strategy like Timothy Sykes’ Millionaire Challenge, where the focus is more on short-term gains. When you have a good balance of high and low risk, along with long and short-term investments, you’re more likely to increase your wealth.
Be Goal Oriented
So many people will say their goal is to build wealth, but what does that really mean? To maximize your finances and work toward the accumulation of wealth, it’s best to hone in on very specific goals that are both short and long-term. The clearer you are about your goals, the more likely you are to stick to them, as compared to broad, generalized goals.
Ask for Help Along the Way
It’s okay to ask for help in your finances, and in fact, many wealthy people recommend it. Being successful and growing your wealth doesn’t mean you have to do everything on your own and be an expert in every area. Instead, be comfortable branching out and asking for help and advice in areas you need it. This can include everything from finding the best stocks to invest in, to how to find the right mortgage for you.
Don’t Automatically Avoid Debt
The myth about building wealth is that debt is bad in the process. That can be true, but it doesn’t have to be. If you’re using debt to make smart decisions, such as purchasing property, it’s not an inherently bad move. Of course, you have to be responsible in the amount of debt you have as well as how it’s paid back, but becoming wealthy doesn’t mean that you’ve completely avoided it throughout your life.
These are a few of the simplest ways you can start creating a plan for wealth building that’s realistic and attainable, for a broad variety of people.