If you don’t come from a family with much money, is it possible to build wealth yourself? The answer is yes, through good personal finance and savvy financial decisions. The tips below can help you get started.
Be Frugal
You might imagine that one of the perks of being wealthy is the ability to throw money around, but the truth is that most rich people who hang onto their wealth are famously frugal. There’s no fortune so large that you can’t spend it all through carelessness, but establishing good financial habits early on and sticking to them can help ensure that you continue to be responsible even as your fortune grows. This doesn’t mean that you never splurge on anything but that you’re smart with your spending. A budget, as discussed below, will help you with this frugality.
Make a Budget
You’re never so rich that you don’t need a budget, and when you’re just starting, it can go a long way toward helping you be smarter with your money and find extra cash to put toward saving and investing. Rather than thinking of your budget as limiting you, imagine it as freeing you so that you always know exactly how much money you have and what you can spend it on, as opposed to dithering endlessly about whether or not to put that item you want into your online shopping cart. Use an app to help you start tracking your spending and base your budget on what you learn from that. Remember to always live below your means; if you aren’t, look for ways to increase your income.
Investing
Look for ways to invest that don’t need considerable cash. Don’t overlook your opportunity to contribute to a retirement fund, which can become a significant source of wealth, particularly if you start in your 20s. If you take out an account with an online brokerage, you may be able to start investing with as little as a few hundred dollars. Another option is investing in real estate shares. With this investment, you own shares of real estate rather than an entire property yourself. Real estate tends to be one of the more dependable investments, offering an excellent way to build wealth, with both a reliable income and growth in value.
Think Abundance
This doesn’t mean you will get rich if you think about getting rich. It means that you should consider in terms of money equaling a life that is abundant and free. When you aren’t constantly worried first about living paycheck to paycheck and later about handling financial emergencies, you’ll begin to get a sense of this. Your ultimate goal should not be an arbitrary dollar amount but figuring out exactly how much you need to lead a lifestyle that is satisfying and meaningful to you and where you can work only when and how you want to. You don’t have to make it onto anyone’s list of the wealthiest people in the world to enjoy financial stability and freedom.
