What is the secret to becoming wealthy? It’s not really a secret actually but most people never realize this “secret” at the same time. The secret to becoming wealthy is to:
1. Be an entrepreneur- start a business, invest your profits back into your business, repeat this process.
2. Spend less than you earn, invest the the difference each month into investments. Stocks, real estate, retirement accounts, etc.
Unfortunately many people do the exact opposite. Instead of following the 2 steps above they:
1. Work for someone else for 40 years. Get paid what someone else tells them they are worth and hope for a pension. That worked 40 years ago, not so much any more.
2. Spend more than they earn, have no emergency fund set aside, steadily slide into more and more debt, and hope things will somehow change.
Ouch! I paint an ugly picture! I’m simplifying a bit here but really this IS what building wealth comes down to. It’s never too late to start either.
I mention numerous business ideas on this blog if you need one. After you have your business idea going it’s time to start saving money.
Start by building an emergency fund, at least $1,000. Why $1,000? Because that amount will get you out of most emergencies that come up in life. This is one of the BIGGEST reasons people spiral out of control. They don’t have an emergency fund which leads to credit cards, which leads to never getting ahead of your bills.
After you have your emergency fund set up, pay off your credit cards. After that start investing. Retirement fund first, IRA or Roth IRA, then real estate, then stocks and other investments.
Above all if you are living paycheck to paycheck pay yourself first. Set aside at least $50 per month for your emergency fund and you will be on your way.
Best,
David
P.S. To learn how to make extra income just by blogging your daily thoughts, like I do, click here!