How To Build Wealth From Scratch
To gain financial freedom, you just have to be wealthy. This means you have the time to do what you want and not live on a paycheck. It is easy to confuse being wealthy and being rich.
Table of Contents
What Does it Mean to be Wealthy?
You have to understand what it means to be wealthy to build wealth. Wealth often measures the value of all the assets of worth owned by a person. It is the accumulation of scarce and valuable resources. Wealth may be either financial (money), social (status), time (freedom), or even physical (health). In this article, we would look at 10 practical steps to any kind of wealth, especially financial.
1. Form Healthy Habits
Discipline is very fundamental in wealth building. Take note of your present habit, make a plan that ensures a productive daily routine. It is not enough to make a plan, you must also consciously stay on track to achieve healthy habits.
For financial healthy habits, decide to record all expenses, save or invest more than you make monthly. This may not be very easy but it takes approximately 66 days for a new behaviour to become an automatic habit. Do not forget to be patient with yourself also as long as you are trying to stay on track.
2. Expand Your Network
You must have heard that “your network is your net worth.” Wealthy people have a large net worth, which simply means they have a larger network. Having a degree is good but your network would help you amass wealth faster.
It is therefore important that you attach importance to your societal status, to the places you go to, people you know, the people who know you and trust you.
Build and maintain meaningful relationships as early as possible.
3. Diversify Your Income
Another popular saying. “Don’t put your eggs in 1 basket” It is unwise to depend on one stream of income. Studies have shown that an average millionaire has 7 or more streams of income. Then you know that you shouldn’t rely on just 1 income stream.
Create a passive stream of income. This means you are making money even when you are asleep! This guarantees you’ll have all the time in the world to do what you want which means financial freedom.
Consider diversifying into real estate investing, stock market investing, starting a business
(66% of millionaires own their business: they choose entrepreneurship over employment), create a blog or YouTube channel and affiliate marketing.
Live your life without limits and build a lasting empire today.
4. Pay Yourself First
This is also a form of developing healthy financial habits. Do not spend more than what you make, you will run into losses and debt. Instead, calculate a percentage of income and pay yourself monthly and live within that pay. This encourages you to do more next month.
Invest and save more than half of your monthly income; investing provides passive income. Never live bigger than your paycheck.
5. Invest in appreciating items
Cars lose about 60%+ of their initial value after 5 years. It is important that you invest in only appreciating assets. Depreciating assets like gadgets or cars are not considered as good investments.
Invest in appreciating assets like stocks or real estate.
6. Health is wealth
That may sound cliche but it is true. Do not be overzealous to make wealth and forget to take care of your health. 76% of millionaires exercise for at least 30 minutes daily.
Create an exercise routine and stick to it. A healthy meal plan is a key to being healthy. Remember that you cannot enjoy your wealth if you have bad health.
Sleep for at least 8 hours daily, take vacations as often as possible, spend time with your loved ones too.
7. Educate Yourself
Financial literacy is essential in wealth creation.
A lack of knowledge in personal finance can leave a long and lasting negative impact on your financial picture such as accumulating unsustainable debts, either through poor spending decisions or a lack of long-term preparation.
Educate yourself financially by taking 30 minutes out of your day. Familiarise yourself with any investment you want to make, know the risks and if it’s worth it.
8. Save for Retirement
It is the ideal thing these days to comfortably retire as early as 34, travel the world and have new experiences.
You can retire successfully if you save and invest as early as possible by using the power of compound interest.
Make your money should work for you, don’t work for your money. Plan for your future and save towards it.
9. Have Funds for Rainy Days
Life is very unpredictable, it is, therefore, necessary to always set money aside for emergencies.
Consider saving 3 to 6 months’ worth of living expenses. This would prevent resorting to taking loans and having debt burdens.
10. Be Versatile
85% of millionaires read books for 30 minutes or more daily.
Books give you a chance to learn from and think like the greatest minds. Know as much as possible on every relevant world subject. This will help you have and maintain intelligent conversations, making informed financial decisions and add value generally.
If you want to succeed, you have to read.