Saving money is one thing, but building your inherent wealth is quite another. It requires short-term sacrifices for the sake of longer-term gain, which can affect everything from your retirement to your mortgage, and freedom to do the things you love most. Read on to learn about the 5 best ways to build your existing wealth, and how you can get started right away. Some of these might seem obvious, but it’s always great to have a reminder now and again.
#5) Spend Less Than You Earn
This one seems like a no-brainer, but it’s actually the one that trips most people up, especially those who aren’t keeping an eagle-eyed tally on their monthly expenses. In fact, it’s responsible for most of the debt load currently crushing the majority of North American citizens right now. The key here is to keep track of the little expenses, as well as the large bills. Yes, that mortgage or car payment might represent a significant chunk of your monthly expenses, but what about that cup (or two, or three) of coffee you’re buying every day? Priced anywhere from $1.25 to $5.00, that can easily amount to an extra $10 to $50 per week on average. It doesn’t take a math genius to calculate the long-term costs. Most millionaires attribute their success to a frugal lifestyle. They skimp on unnecessary expenses, they drive second-hand vehicles, and they re-invest their money for long-term growth. It pays (literally) to take a page or two from their handbook.
#4) Save Early, Save Often
When you’re young, the urge to splurge on a new sports car, a fancy condo or expensive fashion trends might seem irresistible, but it’s a trap that should be avoided. Saving early in your twenties can have a tremendously beneficial impact on your financial situation down the road. One should focus on a goal, such as planning for retirement. Take advantage of RRSPs and tax-free savings accounts to kickstart your wealth pool without having to deal with the hassle later on. While it’s never too late to start saving, it’s far less difficult when you have time on your side. This opens up a lot of possibilities as well, including investment opportunities in your late 20s or early 30s which can continue to expand your wealth.
#3) Eliminate Debt, Stay In The Black
Debt is not an evil word, but it can spiral out of control very fast and lead to serious financial repercussions. Many of us take on regular debt such as car payments, mortgages and college tuition fees to set up our futures. Reducing this debt is paramount for building on your wealth. Consider concentrating your efforts on knocking out your student loan by tightening the belt a little. Forego the fancy brand new car in favor of a used one, and don’t be too quick to take on a hefty mortgage early on. Building wealth means trimming the fat, and that means sacrificing early on so that you can afford luxuries later on down the road.
#2) Put In The Hard Work
Building wealth is rarely accomplished by sitting around and waiting for the money to roll in. Unless you’ve just sold your startup for a few million dollars, chances are you’re going to have to put in the elbow grease and hard work necessary to keep that balance sheet on the uptick. If you’re an employee, make sure you’ve chosen a profession that not only provides financial growth opportunities, but is something you love to do as well. Nothing will kill the urge to grow your wealth faster than disillusionment. Keeping your eyes on the prize is vital for growing your wealth, and that means having the right attitude, commitment and inspiration to keep the ball rolling.
#1) Be Happy, Regardless
This point tends to get lost in the heap of financial wealth building tips that focus more around the “how,” rather than the “why.” While increased wealth can multiply your happiness, it requires the right mindset to do so. On its own, it’s just money. The initial euphoria and excitement of growing your wealth to new heights is a great feeling, but it can quickly evaporate if your personal happiness is not on par. Yes, you may be able to afford nice things, travel frequently and enjoy a stress-free retirement, but this alone does not bring ultimate happiness. Thankfully, you can remain positive and upbeat throughout your wealth building journey if you love what you do, and you have the right support network.
If you’re ready to take the first steps toward building your wealth, we can help. Get in touch with us today so we can guide you towards your desired financial goals.