Job Vacancies, Scholarships, Tech solution and Wealth Creation Tips
Monday, 7 October 2019
Five tricks that increases your chances of wealth
Many people have that dream. And many people never make it. But with the help from these five tips you can increase your chances of living a life of riches.
1. Don't Spend Everything That You Make
The first and most important tip for getting rich is to spend less than you make. Many people spend all the money that comes in, and more, racking up credit card debts that are expensive and difficult to pay off.
If you want to become rich, don’t spend everything that you make. Many employers offer direct deposit from pay check to savings account. When the money comes out of your paycheck before you even receive it, you hardly even notice that it is gone.
You can quickly learn to live on less by simply paying yourself less from your paycheck. There are many places to cut back, from phone bills and TV service, to clothing budgets, household goods, and eating out or going to shows. When you give yourself less money, you will naturally spend less on these discretionary items.
When you don’t spend everything that you make, you are able to save. The target should be to save 5% of your paycheck for long term investments. The plan is to grow this money until you can become financially independent.
You can also save additional money in a separate account for the large purchases that you want to make, like a car or a downpayment for a house.
If at all possible, when making large purchase like furniture or a car, save the money first, and don’t take out a loan or use credit cards. That can be difficult when you are just getting started in life, so for your first car you will probably need a loan. But for subsequent vehicles in your life, save first, and don’t take out a loan.
3. Choose Your Luxuries Wisely
Not all luxuries mean the same to all people. For some people, owning a fancy car is what makes them happy. For some people, being able to travel extensively has more meaning. Or perhaps you want the latest fashion trends.
Choose one or two luxuries that you will allow yourself, but then cut back on the ones that have less meaning to you. Buy a new car only every five or ten years. Eat out at lunchtime instead of dinner. Buy classic styles of clothing that you can continue to wear for years.
You can still feel fulfilled in your life by choosing the luxuries that have great meaning to you, and foregoing the rest. Don’t feel like you have to “keep up with the Joneses” by having the best of everything. Be selective, choose what means the most to you.
4. Have Multiple Streams of Income
Your job is one source of income, and probably the primary source, but your goal in life will be to have enough money that you don’t have to work if you don’t want to.
As you save your money, think about various ways to invest it to let it grow. You can invest in financial markets, like stocks and bonds, or real estate, or other growth markets. Remember to diversify. You don’t want to risk losing everything if one market crashes.If you invest in rental real estate, you can have a stream of income from the rents. Even if you use the entire amount to pay the mortgage and taxes and upkeep on the property, you are still getting ahead, since you build up equity.
Think of other streams of income that you can create. Perhaps you can sell unused items on eBay, or drive for a company like Uber in your spare time, or get a job tutoring students.
As you build these outside sources of income, keep your eyes open for big opportunities. It is easier to get rich by starting a company around a great opportunity than by simply trading your time for money.
5. Pay off Debts Early
Hopefully you don’t have any credit card debt, but if you do, put your whole focus toward paying off that debt. The interest that you pay on credit cards is often greater than the return that you could get by investing your money wisely, so it will cost you more to use a credit card than to save for your purchase.
The amount of money that you can save by paying off debts like car loans and mortgages early is enormous. Get your debts payed off, then put that same money toward your savings, and you will be surprised how fast your money can grow.
By practicing self-discipline and building good spending habits you will be well on your way to becoming rich. With good spending habits not only will you amass riches more quickly, but it will also take less money for you to become financially independent.