How to get rich in 7 steps and reach your goals
Many think that getting rich is impossible, unless you are lucky enough to win the lottery or, perhaps, inherit a large inheritance from your family.
Instead, there is a concrete way to make a lot of money, and anyone at any age can start to follow it.
It will appear to you as a promise without content but trust that that road really exists and in a moment we will tell you about the tools, and methods, to get to your destination.
So how do you get rich?
It’s all a matter of choices
So: to get rich you have to implement strategies, but even first you should start adopting the right habits. What does it mean? We will explain it to you immediately.
Wealth, first of all, is a matter of choice. If you spend more than you earn in a month, making extensive use of loans and financing, your wallet will be filled with liabilities, or debts, compromising your ability to save and invest.
If, on the other hand, you choose to adopt a more moderate lifestyle, it is mathematically certain that you will soon be able to increase your assets.
This does not mean giving up having a car or never taking a vacation: it is enough to weigh your expenses more wisely. Is that 60-inch TV really such a must-have purchase? And is that 170-horsepower German sedan seriously that indispensable for getting around?
Probably, by asking yourself these questions, you will realize that your money could be used better.
Notwithstanding that being rich is still something relative (for many people it equates to achieving economic independence) and that making a lot of money takes time, we offer you our guide in 7 easy (so to speak) steps on how to get rich.
How to get rich: the 7 basic steps
1. Save, save, save
If you want to become rich you have to get into the habit of saving. Warren Buffet, present in the top 10 among the richest men in the world and probably the most brilliant investor of all time, usually says in this regard:
DON’T SAVE AFTER SHOPPING BUT SPEND WHAT REMAINS AFTER SAVING.
Saving must be a structured and recurring activity, not a coincidence.
2. Make money work for you
It takes money to make money, but that doesn’t mean you need to already have a lot of it to start investing fruitfully. Instead, it is the moment you start doing it that makes a huge difference.
To clarify this statement, we must also mention another concept, known to everyone in the world of finance and which, of course, is part of the strategies of anyone who has managed to become rich: compound interest.
Interest is said to be compounded when, instead of being paid or collected, it is added to the initial capital that produced it. This means that upon accrual of interest, the amount will be reused as initial capital for the subsequent period, or even the interest produces interest. (from Wikipedia)
Don’t be scared, it’s simpler than it looks.
In practice, compound interest is that interest that accrues other interests. It is the interest on the interests, and it is a kind of magic.
Let’s take the example of a boy who at 25 starts saving and investing $ 500 a month, every month until he turns 60. In these 35 years he will have saved a good amount, equal to $ 210,000, but thanks to compound interest (let’s assume 8% per annum) the capital he will find in his hand at 60 years will be enormously greater, and equal to over $ 1,000,000.
Did you understand why we said a little while ago that compound interest is magical? With an investment in mixed instruments (equities/bonds), and a long-term time horizon, it is reasonable to expect to earn from 4% to 12% per annum. Of course, you will have to take the time to understand the financial products and tools suitable for investing, then following the investments will be an activity that will take you much less.
In America and Europe, there is a lot of focus on the real estate sector, but the 3 risk factors for this type of investment are often not considered: it requires large initial investments, it is not a liquid market, it suffers from periods of recession. But there is a new way of investing in the real estate market that overcomes all these problems: real estate crowdfunding is collective financing through specific sites for the acquisition of properties with the aim of renting or reselling them.
By its very nature, this type of investment:
- it does not require large initial investments: there are platforms that allow you to invest starting from $ 50.
- it is not affected by the crisis in the real estate sector: industrial redevelopment has a trend that is disconnected from the classic real estate trend and is constantly growing.
- it is not stagnant: the projects have short-term time objectives, unlike the real estate market which is by its nature a medium / long-term investment.
There are many platforms on the market that allow you to do real estate crowdfunding, here you can read a review of the best sites written by Investopedia
3. Develop a written financial plan
Just repeating “I want to get rich” is not enough. To truly become one, one of the most important steps is to devise a viable plan and put it on paper.
In many respects, making a financial plan does not only represent the beginning of a project, but it is also what determines its success.
Do not you believe it? Follow us and we will prove it to you.
For example, let’s say you want to open a restaurant. You will hardly get to open the shutter in the third year if you don’t plan properly:
- how much do you want to earn in the first, second, and third-year;
- how many customers you need to have weekly to achieve that goal;
- how much money do you have to invest to generate that customer flow and so on.
Is it because this approach should be the correct one if you want to open a restaurant, while instead in your life are you willing to go off the cuff without planning anything?
Of course, your financial plan must contain as many options as possible. A well-written financial plan, such as the Monopoly box, should always contain the items “unexpected” and “probabilities”.
4. Live below your means
Having your own style is one thing. But being a walking billboard with designer clothes, Swiss watches, and luxury accessories is another thing.
There is nothing wrong with satisfying a whim every now and then, but buying an apartment or car that costs well above your income is undoubtedly suicide.
Not only will this prevent you from setting aside adequate savings, but it could soon make you shipwrecked in a sea of debt.
5. Don’t accumulate bad debts (and use an advanced checking account)
Don’t shop if you can’t afford it. This, we have said, is a fundamental rule.
However, keeping an eye on your expenses can be difficult if you are used to paying with debit cards or, worse, with credit cards.
These colored plastic plaques that allow you to get into debt, postponing the payment of a purchased product, are a strong temptation for those suffering from compulsive shopping. They make you pile up bad debt and it becomes impossible to keep your monthly outgoings under control.
You must limit their use as much as possible. We give you 3 easy-to-apply tips:
- Reduce the debts you have already contracted.
- Do not use credit cards if you already have the money to make the purchase.
- Open a new generation free current account online that offers you the automatic management of a savings plan, free transfers and withdrawals, and the automatic cataloging of what you spend, so you understand exactly where you can cut and where not.
It will be easier to stay within your budget, keep your expenses under control in real-time (along with those of your family), and know exactly where your money is going.
At the end of the first month, we guarantee that you will already see the balance in your current account increase.
6. Start your own business
In the book “The Millionaire Next Door: The Surprising Secret of America’s Wealthy” the identikit of the “millionaire” or PAWS (“Prodigious Accumulator of Wealth”) is precisely traced, that is, the one who has managed to accumulate a superior wealth in his life to the million dollars.
The two authors divide the population into 3 categories based on income, and by analyzing their spending habits and their behavior they are able to give a concrete answer to the question “how to become a millionaire”.
Well, this research has shown that contrary to what many may think, in the US two-thirds of millionaires are self-employed, and over 75% of them are entrepreneurs.
Only the remainder is made up of professionals such as doctors, accountants or lawyers.
The idea that wealth is a privilege that is necessarily handed down from generation to generation also disappears, and therefore can only concern a select few. The research clearly shows that 8 out of 10 millionaires are first-generation rich people. In short, they made themselves by themselves, thanks to their business activity.
This is what gives you the main information on how to get rich and, of course, should be a warning to all those who are still skeptical about starting to develop their own business project.
If you too are among them and you haven’t launched yet, what are you waiting for? It is the simplest and most direct way to be able to aspire to become wealthy as you have always wanted.
7. Surround yourself with professionals
Finance and business, in general, are complicated sectors, if approached alone and from the outside.
Understanding whether an investment or a company’s startup strategy is right or wrong, safe or risky, profitable or unproductive, is not easy for the layman.
The variables that influence the performance and the correct value of an investment fund, for example, are many.
The risk of doing it yourself, then, is not only that of investing your money in risky and unprofitable investments but also of not being able to choose the plan that best suits your financial or business needs.
The bottom line is that you MUST surround yourself with the right people – professionals who know how to make you make the right decision on the thousands of technical issues any business owner faces every day.
As this research shows, among millionaire investors, 6 out of 10 investors use financial advice to manage their investments, and today there are simple and low cost solutions to receive valid advice capable of changing your financial situation.