Simple Money habits that will help you in building your wealth.
According to Todd Tresidder “Great wealth builders focus on both saving money and earning more.” The empasis here is the gap between your expenses and your income. Expenses should always be lower than your income. The larger that gap is, the more wealth you can be able to accumulate.
If you’re currently living beyond your means and have no additional money to put to work for you, you’ll never build wealth.
Building wealth may seem hard but adopting the following simple money habits can prove to be easy.
1. Automate your Savings.
Automating your savings i.e sending your money automatically to your investment accounts, savings accounts, saccos etc, allows you to build wealth effortlessly. If your financial plan isn’t on auto-pilot, then this is the first step to consider as it ensures that your money goes directly from your paycheck to your savings accounts hence you do not forget or you do not miss on saving. Pete from MrMoneyMustache.com advocates that you should be saving between 30 to 50% of your income.
2.Come up with specific money goals.
“Most people don’t get what they want since they don’t know what they want,” self-made millionaire T. Harv Eker writes in his book “Secrets of the Millionaire Mind.” “Rich people are totally clear that they want wealth.”
Write down goals for your annual income and net worth and be realistic. Wealthy people aren’t afraid of thinking big.
3. Track your spending.
It is impossible to build wealth if you are spending more money than you are earning. To ensure you’re earning more than you’re spending, track your daily expenses. To do this, you can use spreadsheet on your computer or simply record your everyday purchases in a notebook or on your phone.
4. Don’t Buy Crap
Ask yourself what you really need and what you don’t need. Don’t spend on things that you do not need.
5. Earn Much, Much More Money
It is obvious that the more money you make, the larger a percentage you can save. The point here is to make some steep sacrifices so that you can put more of your wealth toward investments that are right for you.
6. Work Hard Now
If you have a job, even though you might not like that job, give it everything that you’ve got. Treat the company that you work for as if you own it. For now, I recommend that you focus on working hard. People around you will start to take notice and probably get a promotion/pay rise.
7. Venture into Entrepreneurship
It is highly recommended that you start building wealth by venturing into entrepreneurship.
The author of “Rich Dad Poor Dad” Robert Kiyosaki introduces the concept of the cash flow quadrant, where He looks at four different entities: the employee, the self-employed, the business owner, and the investor.
For you to make serious money, you have to get into the right type of quadrant which is either the business owner or the investor quadrant where the investor quadrant is actually the best.
In Summary, to accumulate wealth, Make more than you spend and invest the difference wisely and Develop simple daily habits that result in wealth accumulation.