Building wealth is as simple as saving a little bit here and a little
bit there. You need not have great riches in order to accumulate
wealth, but you need to have the drive, determination, and discipline
to successfully increase your wealth. Let’s look at 6 proven wealth
building strategies you can put to use today.
1. Pay Yourself First. If you do not set aside money before you
start paying your bills, chances are you will never save any many after
you pay these same bills. If your employer has a 401(k) or 403(b) plan,
enroll in it and set up a reasonable percentage to invest. The money
will come out before you see your paycheck, therefore the “loss” of
discretionary income will be less noticeable to you. Maximize your
contribution if you are able, especially if your employer matches your
contribution.
2. Save Now. The earlier you start to save in your life, the
more you will have later in life. Of course, if you aren’t able to save
much until after your children are grown, you can step up your savings
until you retire and still have a decent nest egg.
3. Get Rid of Debt. Even before you build up your savings it is
best to get rid of your debt first before starting a wealth building
campaign. If your credit card rate is 14% you will find it difficult to
find any investment that gives you a return that exceeds that rate. It
would be better for you to pay down your debt first and then implement
an investment strategy.
4. Pick The Right Mortgage. If you plan on holding onto your
home for a short period of time, select an adjustable rate mortgage as
your rate will be lower than a fixed rate mortgage. Use the amount
saved to pay down your mortgage quicker; refinance your home if rates
begin to climb.
5. Build An Emergency Fund. Nothing wrecks the best laid plan
more than an emergency, particularly one that costs you money. Set
aside up to six months of your income to live on in case catastrophe
hits. Without an emergency fund you will be tempted to take on debt,
cash in your retirement accounts, and sell valuable investments. Try
recovering quickly from this sort of hit to your wealth without an
effective back up plan!
6. Protect Your Assets. You can have a healthy portfolio and see
it disappear quickly if you are not properly insured. Make sure that
your health/dental, homeowner, life, and disability insurance coverage
is adequate to meet your needs. All it takes is one legal judgment
against you to wipe out your assets.
Instance riches come to a few, but most riches are realized after
careful planning and effective management of your resources. You can
properly prepare for the days ahead by implementing these six proven
wealth building strategies today.
