Do you dream of being rich?
You’re not alone. Most Americans have that very same dream.
The last thing we want is to be slaving away for minimum wage all our lives and having to work past retirement. If you learn how to become rich, you won’t have to.
In this post, we’ll tell you everything you need to know.
Learn How to Become Rich
Use this handy guide to start boosting your finances.
Live Below Your Means
You might think the lifestyles of the rich and famous include glamourous cars, houses, clothes, and vacations. Despite what we see in the movies, that’s not always the case.
Some of the richest people in the world have the money they do because they live below their means. This is why you always see people like Mark Zuckerberg or Bill Gates overspending on clothes or jewelry.
Assess your outgoings and look for ways you’re overspending when you don’t need to. Then, switch them for cheaper alternatives. You’ll make huge savings over time.
Pay Off Bad Debts
Are credit card debts and high-interest rate loans draining your income every month?
You’ll need to eliminate these as soon as possible. Instead of simply making the minimum monthly repayments, increase them so you can pay the entire balance as quickly as possible. Otherwise, you’ll end up spending far more than you borrowed as time goes on.
If you have enough disposable income to take this route, you’ll free up money to spend on other things.
Getting rich takes time, and one of the best ways to make it happen is to start investing your money right now.
One way you can do this is to take advantage of your employer’s 401(k) plan. If you put enough money away every month, your company will add an extra dollar for each one you contribute. This can double your savings!
Another route is to open a Roth IRA. This allows you to keep tax-free savings in your account of up to $6,000 per year.
Plan Your Spending
Learning how to get rich isn’t just about earning money. It’s about how you spend it, too. That’s why you need to know how to budget properly.
This doesn’t mean you have to be a penny pincher. You can still spend money on the things you enjoy, but you have to do it wisely.
Here’s a rough framework for you to follow:
- Spend 50%-60% fixed costs like rent and electricity.
- Put 10% away in investments.
- Keep 5%-10% as savings.
- Leave 20-35% free to spend on the things you enjoy.
A lot of overspending is simply a result of poor planning. We all know the feeling of not wanting to check our bank accounts for fear of the balance is painfully low.
It can be hard to keep on top of your spending, so get around this problem by automating it where possible.
This means setting up standing orders and direct debits so money is automatically debited from your account and used to pay off your expenses as soon as you get paid. This is the easiest way to take care of the first 50-60% of your income and get your biggest and most important expenses out of the way.
When you set your spending up this way, you can avoid having to pay any extra charges or interest. You also get your expenses paid immediately, so there’s no chance of you accidentally spending too much and leaving too little in your account to cover your bills.
Negotiate Your Bills
You may think you’re stuck with the expenses you have, but you’d be surprised how many you can cut if you negotiate.
Sometimes, all it takes is a few phone calls. Try calling your providers for cable, credit cards, insurance, gym memberships, phone packages, and other services, and asking what they can offer you. In many cases, if you tell them you’re thinking of switching providers, they’ll offer you a better rate.
They want to keep you on-board, and sometimes that’s all it takes. Lots of customers don’t bother to do this, so give it a try and see if it works for you.
Using this method, you can save yourself hundreds of dollars a month.
Play the Lottery
One of the only ways to come into a large sum of money with immediate effects is to win the lottery.
We’ve all dreamed of hitting the jackpot at some point in our lives, wondering what we’d spend our fortunes on if our luck came in. It may seem unlikely, but it can happen. As they say, you have to be in it to win it.
Discover more about how you can be in with a chance of winning.
Make Money on the Side
Do you have a passion, skill, or hobby you could make money from on the side? Why not turn it into a side hustle?
More and more people are taking up this way of making money and for good reason.
In an ideal world, everyone would have a full-time job they loved. Unfortunately, that’s not the case. Side hustles provide ways to balance the scales by pursuing passions and making money at the same time.
If you’re crafty, create your own products to sell on Etsy. If you love animals, become a pet sitter, dog walker, or groomer on the weekends. If you’re handy with a camera, start your own photography business.
If you’re good at something, don’t do it for free. Instead, brainstorm some ways to make money from it. This way, you can increase your income and bridge the gap when you’re the main paycheck doesn’t cover your expenses.
Make Money Moves
Now that you know how to become rich, you can start taking the right steps towards boosting your income and increasing your savings.
But, it can be hard to do this when you have bad credit. If a poor credit rating is stopping you from getting the financial services you need, there is help out there.
To find out more, read our post on the best bad credit loans to apply for.