“The very first step to building wealth is to spend less than you make.” Brian Koslow
- Wealth building doesn’t happen overnight, but financial planners say a few steps can put you on the right path.
- Start by tracking your cash flow, calculating your net worth, eliminating bad debt, and, making saving and investing a habit.
- Then, they suggest using high-yield savings accounts or a 401(k) with an employer match to keep those savings growing.
The key to accumulating wealth isn’t always simply to make more money. Sometimes, it’s about using what money you have more effectively or using what you financially control to your advantage. Maybe it’s as simple as moving your savings into an account with higher interest rates, spending less than you earn, or taking advantage of an employer’s 401(k) match.
Most importantly, experts say one of the most important elements to building wealth is to believe that it is possible and simply give it time. The best ways to start building wealth today, according to financial planners, are straightforward and simple.
The seven (7) ways, according to Business Insider, to build wealth are:
- Figure out your net worth
- Start saving automatically
- Take advantage of your employer’s 401(k) program
- Look at your cash flow
- Don’t just let money sit — keep it growing
- Make your savings, investing and accumulating wealth a priority
- Be patient and think long term
Financial Milestones
One rule of thumb for building and monitoring wealth says that by the time you turn 30, you should have the equivalent of your annual salary saved (that’s all savings, not just retirement assets); double your salary saved by age 35; three times the amount by age 40, and so on. If you fall short, don’t fret, it’s never too late to increase your savings rate and it never hurts to aim high—
Take full advantage of your employer match, if one exist. For example, with a $50,000 salary from an employer matching up to 6% of your contributions, you’d be turning down $3,000 each year. Most people’s pay consists of a package that includes salary and employer benefits. You wouldn’t accept a $3,000 pay cut without a fight; by letting your employer match go to waste is kind of the same thing.
Build an Emergency Fund
Each year brings economic uncertainty to many and, even for the financially secure, life happens in the form of medical bills, domestic catastrophes and other unplanned expenses. As a general rule, it’s good to maintain an emergency fund that would cover three to six months of living expenses in case you find yourself unemployed. And, once you’ve calculated how much you should save, set aside a certain amount from each paycheck to set you on your way.
Retire Bad Debts
It imperative to eliminate or reduce bad debts. We all know which ones they are: the loans used to pay for a wedding; the credit card with the sky-high interest rate whose balance keeps rolling like a Sailor at an open bar. And, making only the minimum monthly payments on credit card and consumer debt. It is recommended set a deadline for repayment and getting rid of the growing interest and debt.
Benefits of a Budget
Money is often stretched in many directions. Daily expenses, entertainment, life events and long-term goals—all competing for the same dollar. Budgeting can help ensure you’re covering the essential monthly expenses, saving for the future and, with some discipline, have some extra cash to reward yourself for your good work.
— Read on www.businessinsider.com/best-ways-to-build-wealth-starting-today-2019-8
https://www.tiaa.org/public/learn/personal-finance-101/5-must-have-financial-goals