Many people have been searching for the answers to the question “how do you create wealth?”. The subject of wealth is not often discussed in the traditional school systems and sometimes not even within households. The dictionary Merriam-Webster defines wealth as “abundance of valuable material possessions or resources”.
In my own words, wealth is having the ability to stop working and money still pours into your bank accounts at the least enough to cover your bills and expenses.
In this post we will discuss wealth creation basics which include:
Financial Education
Investments
Goals
Creativity
Financial Education
The number one way to achieve financial independence is financial education coupled with action. Financial education is what educates a person on understanding the difference between a asset and liability. Assets put money in your pockets while liabilities take money from your pockets.
The rich work for assets and not money. Their are countless assets that can help you become wealthy and i’ll name only a few which are the most common.
The four major common assets that makes a person wealthy is a business, paper assets (stocks, bonds, mutual funds, etc), commodities, and real estate.
The foundations of wealth creation are listed in the following sequence:
A vehicle to generate income and/or profits (Most people it’s jobs or people who start businesses).
Savings
Investments
Investments
Most people have jobs others have their own businesses in which money is made through wages and or profits. After making this money saving portions of it helps start the journey to wealth building. As you save you begin to study investing and opportunities to grow wealth.
I had a friend i was talking to about investing and she didn’t know where to start. I recommended she develop goals then explore a wide range of investing opportunities to see what would best align with her overall goals.
There are major resources on the internet that help people understand investments such as the blog “Wise Bread”. Check out this article on the “How to start investing with just $100”.
Anyone at any age can begin to build wealth. Even if you’re a student, which i once was with less then $1000, you can still start investing.
If you don’t believe me check out advice from finance blog Money Crashers on “ Investing as a Student: 7 Ways to Get Started Young With Under $1,000”. This article mentions to start the habit of developing a high savings rate, automate your savings, and venturing into finding a side hustle.
A few investing opportunities include index funds, peer to peer lending, and crowdfunding. Also, it is important to learn more everyday about finances to help increase your understanding of money and creating wealth.
I will share with you the rules of wealth creation that i learned from reading the book “Think and Grow Rich” by Napoleon Hill.
Decide on the exact amount of money you desire to have in your possession.
Make clear what will you give in return for amassing the wealth you are seeking.
Determine a clear deadline and definite date for the accomplishment of the wealth you intend to have.
Create a definite plan that guides your actions in your pursuit of financial success.
Write out a clear specific statement of the amount of money you intend to acquire, name the time limit for its acquisition, state what you intend to give in return for the money, and describe clearly the plan through which you intend to accumulate it.
Read out loud your statement, twice a day, once when waking up and again before going to sleep at night. As you see and read statement believe you are already in possession of the money.
We all or at least most of us would like to earn more money. This blog, financeblog.co ,discusses ways to earn more.
Here are three ways to earn more that i enjoyed reading about: Invest pocket change with acorns, invest in apartments and commercial real estate for as little as $500 bucks with companies like fundrise, and rent out rooms for extra cash on airbnb.
Earning more is good and sometimes it helps to read information that relates to you.
When reading about finance some people find resources that are most relevant to them. This blog, “Money Under 30” , focuses on money advice for young adults. The advice that has helped improve my life was from a selection from the money under 30 blog called“How much should you save every month?”.
With this i was able to decide on the exact number i would aim for to save. My savings rate increased due to the fact that i knew that exact number i was targeting for my monthly savings goal.
Investing is scary for people who do not know what they are doing or just getting started. It may be a good idea to start small and get use to investing then make bigger steps along the way.
If you’re in the process or would like to start exploring what investments are out there then consider this article from The College Investor blog “The top five best investing app that let you invest for free in 2019”. Here you will discover different tools to help guide you in your pursuits to begin or continue investing.
Goals
Another great idea, is to take a sheet of paper out and write out at the top of the paper your goal in the form of a question. After writing out the question you list 21 different answers.
For example, if a person desires to double their income in 12 months the question at the top of the paper would be “how can i double my income in 12 months?”. Next, you list 21 ways such as but not limited to change occupations, start a business, work longer hours, etc then pick one on the list an begin working on it.
There are incredible benefits to becoming rich. If you don’t believe me ask Mr. Money Mustache from his blog on “The Real Benefit of Being Rich” article that discusses the benefits.
Being rich provides freedom and more time to yourself and family. The thought of being able to work by choose is enough to be joyful and start planning ways to become rich and live prosperously.
Although everyone has problems the rich worry less about money because they have it in such an abundance.
Additional information that will improve your chances of becoming wealthy is to take the concept of continued learning to heart. This concept says that for all your life you dedicate yourself to learning and growing your knowledge.
Things change, especially information and trends, so it is critical to read in your desired field or as it relates to this article financial education knowledge so you are able to stay updated.
The minimum is reading a hour a day. If you are doing less then this you are making it harder for yourself and are falling behind. Personal development is what takes a person from rags to riches.
Successful people not only are always reading and learning but they are action and results based driven. This means that activity is not what they value but getting the results that help them advance their ambitions.
This mentality improves a person’s focus. Focus is not to be overlooked because Bill Gates & Warren Buffet both said in a documentary that “focus” is what propelled them to their riches and is the advice they would give to aspiring wealth-seeking leaders.
Creativity
Creativity and customization is also important for pursing a great fortune. When we read information it is important we understand how to use that information to improve our financial situations. Here is an example, i have read a good portion of financial literature and some i quote say “It is not how much you earn but how much you keep that counts”.
I disagree because if a person is making minimum wage or living paycheck to paycheck then they will not be able to save much or anything because what they are earning is not enough. A person in this situation can customize this information by simply seeking and attaining opportunities where they make more money so then they can save more and ultimately invest.
The creative part tends to come from brainstorming and experimenting with different ideas. The rule of thumb is to try new ideas seven to ten times before passing judgement on it.
I have come to the conclusion that if a person simply sets goals that are in writing, read everyday, and take action this will put you in a position to obtain whatever it may be.
It is a wonder how there are countless ways to increase a person’s income yet very few know how or attempt to. The more avenues of making more money you know the more likely you are to achieve the outcome of making more money.
Take the lessons and different ways to pocket more cash while at the comfort of your home from popular website “Well Kept Wallet” on “52 Legit Ways to Make Money from Home”.
There are stories of people of every race and socio-economic background that have paved their way to great fortunes. One story involves a man who never made more then $12 dollars but retired with $500,000. There is a solution for all situations that people can use to enable and empower them to acquire riches.
Exploring the concept of compound interest is a excellent way to start and create in your own way a plan for financial growth. For those who want to achieve financial Independence sooner studies show the best indicator of retiring early is your savings rate.
Most if not all early retirees had a savings rate of 20% of annual income or higher and invest that money over decades while starting at a young age. You control your financial future and your life can be transformed now if you choose to make the decision to become wealthy and take action.
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