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11 Tips for Those Who Want to Achieve Financial Well-Being: How to Become Rich
09.07.2024 20:15
Many people dream of becoming rich.
But how much money does it take to be considered rich? It's actually very subjective.
For some, it's a house in the countryside, while for others, it's their own plane and a hundred-meter yacht. In addition, wealth itself is not always associated with money: for many people, wealth is their family, friends, and work.
How to become rich
There are many ways to do this: become an actor, singer, athlete, top manager of a large company, and so on down the list. A more traditional approach is to open your own business and invest.
- Starting your own business is extremely stressful. According to global statistics, about 80% of new companies fail in their first year of operation. Of those that remain, another 80% fail within the next five years. Very few companies succeed.
- Investing is a mechanism for achieving wealth that is accessible to most people. Of course, investing will not bring in a lot of money for many years. And you need a lot of patience to succeed in this area. And the following tips will help you.
Stop expecting a miracle
Don't wait until you win the lottery, until the economy starts to improve, until you get a promotion at work, or until you inherit a large fortune from an unknown relative.
Waiting is wasting valuable time, and even if you are far from your financial goal, you have to start somewhere. Start from your conditions and think about what you can do today.
Make sure your expenses do not exceed your income.
Your income must be higher than your expenses. To achieve this, you have only two options: reduce expenses or increase income.
In many cases, cutting expenses is relatively easy, but sometimes you need to break some bad habits.
Go to your online bank and check your account statement for the last month, there you will most likely see a number of expenses that you can get rid of in the near future.
Increase your income
If you can increase your existing income, the process of accumulating wealth will go faster.
There are various options here, such as asking (demanding) for a pay raise, working more hours, changing jobs, or finding extra work on the side.
Pay off your debts
Debt is interest payment that eats up your income. So try not to borrow and review your existing debts, determine which of them and in what time frame you can pay off.
Loans are good to take only if you invest them in your business. Consumer loans make you poor.
Save for a rainy day
A crisis is always possible, and to make it easier to get through it, accumulate a large enough reserve in case of unforeseen expenses.
A financial cushion means financial security. But don't underestimate the emotional factor it brings: with a good cushion, you'll sleep well at night.
Make savings
Set aside 10-20% of your salary each month, preferably more if you can.
See what low-risk, low-entry investments are available to you. Invest every month, even if it's a small amount. It's better to invest something than nothing at all.
Diversify your savings
Don't put all your eggs in one basket. No matter how much you believe in a particular company, it's foolish to expect too much from one fund or company.
The market is an unpredictable thing, and even large companies regularly experience financial problems. Therefore, it is extremely important to distribute your savings and the risk you take.
Reinvest your earnings
By reinvesting your profits, you get the full power of compound interest, and your capital growth will begin to increase rapidly every year. Therefore, in the first years, do not spend the income you receive, it is better to reinvest it.
Think long term, but act today
Want to get rich quick? Go to the casino! That's where you can become rich in just minutes. But most likely, you'll lose everything you have there.
With regular investments, the situation is similar: the higher the interest rate on investments, the greater the risk. So, be prepared for a long time and do not rush.
Formulate intermediate goals
Having clear intermediate goals makes it much easier to stick to your plan. Determine the amounts you want to save in 6 months, 1 year, 5 years, and 10 years. This will make your goals seem more achievable.
Take care of yourself
It is important to be goal-oriented, but at the same time remember that no one else will care about your health.
And health is an asset that is easy to lose and extremely difficult to restore. Therefore, always think about your health: exercise, eat well and sleep as much as your body needs.
Earlier it was reported that Musk predicted a sad fate for the dollar due to the US government debt.
