Reaching your money goals and never having to worry about money is something we all aim for. Wealth enables you to meet your goals faster, take care of your loved ones, and turn your life completely around. If you are tired of your 9-5 job or making less than you are capable of, you’ve come to the right place.
We will go through the 7 steps you can take to start building wealth and make as much money as you desire.
CUT BACK ON EXPENSES
Spending more than you earn is one of the main reasons that make it difficult to reach your financial goals because if you are living above your means, there is no way you can be as wealthy as you desire to be. So, cut back on expenses. Consider your monthly income and go over your daily, weekly, and monthly expenses. How much do you make and spend?
Write an exhaustive list of all the things you buy but don’t need and cross them off your list. Identify and separate needs from wants. Have a notebook and pen or use Microsoft excel for your entries. Create two columns and name the first one ‘Needs or Necessities.’ Name the second one ‘Non-essentials’. List all the things you need under ‘Needs’ and everything you can do without but spend money on anyway under ‘Non-essentials.’
Include every expense on both columns. Get rid of all things listed under the ‘Non-essentials’ column and commit to never spending any money on those items.
Focus on your needs. Consider your monthly income again and determine how much you can afford after cutting back on expenses. How much do you save?
Create a monthly budget and stick to it. Determine how much you are going to spend each month and don’t go over your budget. If you are always tempted to buy more when shopping for groceries, have a grocery list. Write down everything you need before going to the supermarket and don’t purchase anything that’s not included in your list.
Have an emergency fund just in case something unexpected happens. Set aside a certain amount of money weekly or monthly and deposit it into your account. Start with what you can afford and grow from there.
After cutting back on expenses, I’m sure you have some money left from your pay that you can channel into your emergency account after covering expenses. Don’t use the funds for anything else other than an emergency or an unexpected expense such as an unforeseen illness, car repairs, home repairs, moving expenses, job loss, or family emergency.
HAVE A SAVINGS ACCOUNT
Next, create a savings account and have a clear picture of how much you are going to save. Set goals and determine your long-term savings. For example, why do you want to save? Is it to supplement your monthly income or you want to launch a startup? Clearly define your goal to ensure success.
Next, determine how much you want to save and how long it’s going to take. Specify the money you want to have in 5 or 10 years in your savings account. Outline the steps you are going to take to ensure you reach your goal. Are you going to save daily, weekly, or monthly? Where will the money be coming from? Will you deduct it from your salary or other accounts and deposit it into your savings account?
Next, make your money work for you. The best way to grow rich is to invest your money instead of just leaving it in your bank account and hoping you’ll reach your financial goals. So, as you grow your savings, look for ways to invest in something that will benefit you and ensure wealth or get you a step closer to becoming as wealthy as you desire.
Consider the most profitable investments and ensure the highest returns. Learn more about investing in real estate, bonds, stocks, cryptocurrency, and so forth. Choose an investment that suits your budget and helps you meet both your short-term and long-term goals. Find what works best for you and go with it.
MAKE SMART INVESTMENTS
Investing comes with great risk so make sure you understand what you are spending your money on before doing so. Learn about investing and the type of investment you choose. Weigh the associated risks and identify the benefits tied to your investment. What do you stand to benefit? What sort of risks are more likely to occur? Is the reward greater than the risk? And can you afford to incur losses in case the investment doesn’t turn out the way you expect it to? Invest in things you believe in and understand to avoid losses. For example, if you are a business owner, invest in businesses within your industry. Define your goals and determine what you want to achieve. Consider your short-term and long-term goals. What type of investment gets you to your goal?
Use different investment strategies to increase your chances of success and accelerate results. For example, value investing, contrarian investing, income investing, growth investing, and so on. Stick to strategies that allow you to maximize your return while minimizing risk. Know and implement the best practices. For example, create an investment plan, have an investing budget, know the kind of investments to avoid, invest regularly, diversify your portfolio, and keep track of your investments.
Use the best investing apps to learn about investing, start trading, manage your finances, and see the desired results. Some of the best apps to look into are Robinhood, TD Ameritrade, Betterment, and Acorns.
PAY YOURSELF FIRST
One of the most effective and proven ways to build wealth is to pay yourself first. So, set aside a certain percentage of all your earnings weekly, monthly, or as often as you earn and deposit the money into your savings account, investment accounts, or retirement account. Decide how much money you can subtract from your paycheck into your account before paying everyone else. It doesn’t have to be much. You can deduct as little as $50 per month or as much as $300 per month. Depending on your salary and budget.
Pay yourself first and then take care of other equally important expenses such as taxes, the credit card company, insurance, bills, tuition fees, groceries, and so on. Make sure you withdraw what you can afford regularly and never skip a month. Automate the process to make things easier. For example, you can have money deducted from your salary monthly and deposited straight into your savings or investment account before receiving the paycheck. Be consistent and prioritize paying yourself as much as you prioritize your monthly expenses.
If you do it right, you will easily meet your money goals and accumulate wealth over time.
HAVE MULTIPLE INCOME STREAMS
Don’t depend on your salary or one income source to build wealth because it never works. Create multiple streams of income and improve your earning potential to ensure success.
Start a side hustle, become an entrepreneur, or launch a business on the side if you have a 9-5 job and want to keep it. Brainstorm profitable business ideas and do your research. To succeed, consider your skills, interests, and passions. What are you good at? And what are you passionate about? Identify your top skill or one thing you do better than anyone else you know and monetize it. Conduct market research to see if it’s something you can turn into a profitable business. For example, if you are great at designing clothes, what’s the market like? Will people be interested in your designs? Is there a market for your clothing line? And Who do you want to sell to?
Define your audience to ensure you market to the right people and get a return on investment. You can define your audience based on gender, age, tradition, hobbies, and so on. For instance, if you are a sports fan and want to design sportswear, will you target golfers, footballers, or design for all athletes?
Once you decide, create great designs, come up with a business strategy, identify your value proposition, and launch your business. Create an effective marketing strategy to reach your target audience and ensure success.
Diversify and offer related products or services. For instance, sell sporting goods, and so on. Have more than one income source to accelerate results and make as much as you desire.
Become an entrepreneur and take advantage of the countless opportunities to make money online. Start an online business and market your skills. Create online courses, become a blogger, a freelance writer, web designer, consultant, and so forth. Choose something you love to ensure success.
Once you decide on your side hustle, conduct research, create your brand and build brand awareness. Define your business mission, vision, and goals. Come up with a catchy industry-specific name. Design your company logo and choose your primary colors. Hire a graphic designer on Upwork or PeoplePerHour to design your logo or do it yourself, if you prefer.
Use Adobe Photoshop or GIMP for a professional design.
Have a business website and create social profiles. Use your social media pages to reach prospects, connect with your audience, raise brand awareness, build loyalty, and increase traffic to your site. Define your value proposition and use exciting promotions to pique interest, convert followers into buyers, establish relations, and boost sales.
Invest in paid ads to reach a bigger audience and speed up the marketing process. Create eye-catching and compelling ads. Use images and videos and add calls to action to inspire action. Create an effective marketing strategy to grow your audience, gain trust, and increase sales.
Tap into content marketing and become a blogger. Pick a niche and stick to it to build industry authority, become the go-to person for particular information, and grow your audience. Produce high-quality content that your audience finds useful. Figure out what sort of information they favor and meet their needs. Identify common problems and offer solutions. Use how-to guides, reference guides, ultimate guides, comparison articles, quizzes, and so forth to boost interaction and keep them interesting in your content. Create helpful content for more shares and likes. Market your free content on your social media profiles. Post about it and talk about the content you produce. Convince them to read your blog or subscribe to your YouTube channel by highlighting what they’ll benefit from doing so.
Generate passive income through affiliate marketing. Join reputable affiliate programs to ensure returns. Work with Amazon Associates, CJ Affiliates, eBay, TripAdvisor, ClickBank, or ShareASale. Look into eBooks, digital downloads, and courses for other effective passive income ideas and aim for at least 5 income sources to reach your ultimate goal.
INVEST IN YOURSELF
Invest in yourself to ensure success. Constantly look for ways to improve, increase your earning potential, and advance in your field. Do one thing better than anyone else you know and be the first person your friends or colleagues come to for solutions to a specific problem. For example, if you are good with numbers, be exceptionally great that people around you come to you for financial advice.
Cultivate your skills and constantly look for opportunities to grow. Obtain the highest level of education in your field or invest in paid online courses. If you are a business owner or want to start a business, research relevant courses that will help you advance your skill in your line of business and turn you into an expert.
Choose reputable institutions and get a verified certificate to prove credibility and help prospects trust engaging in business with you. Go to Udemy, EdX, or Coursera. Enroll in paid courses and start learning. Complete the course and implement what you learn. Learn a new skill to diversify, expand your business, and increase your chances of success. Enroll in MOOCs or massive open online courses and start learning.
Monetize the newly acquired skill and look for opportunities to make money online. You can also turn your hobby or passion into a business. Conduct market research and find effective ways to turn it into a successful side gig.
HAVE A FINANCIAL ADVISOR
Create a financial plan to meet your short-term and long-term financial goals. Use the plan to gain more control over your money, investments, and expenses. Let it guide you in your day-to-day decisions to ensure you stay on track and avoid losses.
Consider your current financial situation, needs, objectives, and goals to create a plan that works. Constantly monitor and adjust your strategy to suit your needs and reach your aims. Invest in a financial advisor to manage your finances better and build wealth. The advisor will help you make smart financial decisions, avoid losses, and ensure ROI. He or she will help you identify worthwhile investments to ensure returns and avoid bad investments to evade losses.
The advisor will also guide and help you make informed decisions about growing your business. For example, if you want to expand your business, you will know whether or not you can afford to. You can easily know the right time to hire more employees, establish new offices in various locations, increase your marketing expenses and take it to the next level without risking bankruptcy.
As an investor, you need a financial advisor or wealth manager to avoid throwing your money down the drain, come up with an effective strategy, avoid financial traps, protect your investment, and grow your money. It keeps you accountable and protects you from running with the crowd.
Your manager can also help you assess your financial situation, learn more about the type of investment you are making and determine whether or not going with it is wise.
If you can’t afford a full-time financial advisor hire contractors. Make sure you work with someone who is experienced and who can help you meet your goals. Ask important and relevant questions before getting into business with them to avoid misunderstandings. For example, “How long have you been in business?” “What are your qualifications?” “Have you ever worked with someone in my field or with my current needs?” “How do you charge?” “What communication channels can we use?” and “How often are we going to meet?”
Meet with your advisor regularly to assess your financial plan, address rising issues, and make the necessary adjustments.
You can also use a Robo Advisor especially if you are in your early stages of investing. Robo advisors provide financial advice with little or no human involvement. They provide access to a broad stock market at a low cost. However, there are risks tied to working with an automated advisor. So, do enough research before jumping headfirst. Some of the best Robo-advisors to look into are Wealthfront, Betterment, Stash, Ellevest, and SigFig.
Building wealth is a process that requires time, dedication, hard work, and proper planning. So, conduct enough research, work smart, invest in the process, and start today to succeed.