How to Build Wealth: A Simple Plan and Taking Action.
What is Wealth? Is it a room full of money that you can swim in? Is it freedom to do what you are inspired to do regardless of the monetary cost? Is it financial security for you and your loved ones? For most of us, it is all of the above plus more.
Wealth and the accumulation of it has become somewhat of a “dirty” word that is associated with rich arrogant politicians and business owners. The fact is that this mentality and view of the word is incorrect and inspires a scarcity mindset. In reality, you and most of the fortunate people who live in America have the opportunity to live a “wealthy” life. Today is the day we explore the thought process and actions needed to get you on the road to wealthy living.
Create multiple streams of income
Sit back and imagine you are sitting by a small tiny creek with your toes dipped in the water. It is a beautiful sunny day with birds flying overhead and flowers blooming. In the distance you hear a large roaring water, but that can’t be right because the stream you are sitting beside is only a few feet wide and very shallow. The noise persist and you can help but discover where it is coming from. You get up and start walking alongside the creek. As you walk, the creek widens and you start to notice other smaller streams flowing into the once small creek. The combinations of the many small tributaries have created a much larger body of water. What was once a small shallow creek is now a roaring river full of rapids and waterfalls.
What does this have to do with Wealth? This is a visualization of how multiple streams, in this case, “creeks” can combine to become a much larger “river” of income and wealth. Multiple streams of income is the first and core principle of creating optimal wealth for you and your future. Dependence on one source of income your entire life is inefficient and the riskiest bet you will ever make. What happens if that one stream dries up? You could have a great job that pays well but in 10-20 years it may be obsolete and you will be scrambling looking for something else to keep you afloat.
Technology has changed how we communicate and help to bring barriers of entry down for making money on your own. It has never been easier for you to make an extra $1,000 per month. You can look around the room you are in right now and list a hand full of items on eBay within an hour. You could also list services on websites like fiverr. There are endless ways to make money by leveraging technology and the internet. The easiest way to decide what you can do to make more money is to examine the skill set you currently have and find a way to use the skills you possess to make money. Think it, plan it and take action today. Don’t wait to make more money. Every day you wait, the less you will make.
Spend less than you make
Now you know you need more money and you have a pretty good idea how to do it. What’s next? Simply, spend less. Once you start bringing in extra income through multiple revenue streams there will be a temptation to spend more money. Don’t allow this to happen. A great way to counter this is to set up automatic saving plans where money is automatically transferred from a checking account into a savings account that is difficult to access funds immediately.
Try this, look at how you currently live. Examine where you can save some money(i.e. Get rid of cable TV, buy generic groceries, consolidate trips out to save on gas etc.) and take action today. Reduce the amount you spend while increasing the money you make. This can have a huge impact on the wealth you will build. As this continues year after year the snowball of personal wealth will grow exponentially. Simply put you are earning more and spending less. The trick is talking action and sticking to the plan.
Invest for the future
Yes! You have a plan to start making more money and you have devised a plan to save more money by spending less. You, my friend, are on the path to great wealth. That can’t be all you can do right? You are smart cookie, there is plenty more to do! The next step is to take the money you have made and saved and invest it wisely.
Investing can scare a lot of people. The fear of dumping all of your money into a stock market and hoping it doesn’t crash is very understandable. Before you panic, there are plenty of ways to invest where you have control and insure a great return on the money you put in. Below are just a few examples.
Real estate is a great vehicle for long term investing. Buying a rental property in the right area and vetting renters properly will yield an investment that can generate monthly excess cash as well as build equity in an asset without you putting much of your own money at risk. I could write multiple blog post on this topic, and plan to in the future. For more info I would suggest checking out biggerpockets.com. This is a great resource full of information for anyone looking to get into real estate investing.
Another great vehicle to invest your wealth is to start your own business. Once you have a modest amount of money saved and ready to invest, these funds can help leverage the start of a online business, service based local business or even a brick and mortar franchise. Look at your strengths, what you are passionate about and if you and combine those into a business. The returns on a business can be amazing and cut years off years of slaving for a boss you hate.