Wealth is an elusive thing. It’s really very personal, but it’s also simple. If you consistently maintain the right habits and the right mindset, you’d be surprised how easy it is to become wealthy. Here are my top ten methods for becoming wealthier.
1. Invest, Early
Investment is one of the smartest methods you can use to become rich. I do it, and most of the wealthiest people I know do it.
The key, according to author Ramit Sethi, is to start early. Let’s look at Sethi’s example:
“Say you’re 25 years old, and you invest $500/month in a low cost, diversified index fund. If you do that until you’re 60, how much money do you think you’d have? $1,116,612.89.”1
His example is based on an 8% annualized return: the long-term average for the S&P 500.
The real key to getting rich through investing is to invest consistently over the long-term. No buying and selling your stocks, no timing the market. This method gives you a high chance of becoming rich over 20-30 years. Eighty percent of the millionaires in a study about millionaires by Thomas Corley over a period of five years didn’t become rich until they were 50.2
2. Reduce Living Expenses and Enjoy Life More
If you get into the habit of spending beyond your means, you’ll never become rich. It’s as simple as that! So reduce your living expenses and find ways to enjoy life more without putting your hand into your wallet as often. Here are some ideas:
- Buy in bulk. This is a hugely efficient way to shop, and it’ll save you money if you eat and use everything you buy.
- Canning and storing food for later is one nice way of making your food go further and avoiding losses.
- Break up with your credit card and never get one again!
- Reduce how much energy you use, or start producing your own. Solar panels are a great investment over the long run, as is insulation. Challenge yourself to see how much you can reduce your utility bills over one year.
- Hunt or forage for your own food. Fishing, picking wild mushrooms, edible flowers, raising chickens in your back yard and gardening reduce your costs and are very healthy ways of decreasing your costs.
- Downgrade your care and your house, or get a roommate.
- Examine what you’re buying to compensate for negative emotions caused by your lifestyle. Is your job making you happy? Do you really want to go and travel the world on a sailboat, re-locate to a destination with a better climate, or start your own business? Being wealthy is being happy.
Saving is hard if you’re in debt. But putting away 10% of your monthly income into an account that you never touch before you pay for anything else is one of the easiest ways to become rich! In fact, Thomas Corley’s research showed that 94% of the rich saved 20% or more of their income in his five-year study. Once you’ve reduced your living expenses, this is as easy as pie.
Sticking to a budget is another way to save money. Tracking your expenses is another great way of taking control of your money, as you’ll see what you’re spending excessive money on each week. Remember to celebrate your savings, and enjoy that feeling of growing financial security so these measures don’t make you feel like you’re limiting yourself.
Other ways to save money to become rich? Save your tax refund each year, and invest it wisely. And refinance your home mortgage to a lower rate or to a 15-year loan instead of a 30-year loan. Often, you will pay a few extra hundred dollars per month, but you’ll save hundreds of thousands of dollars in the long run.
4. Start Your Own Business
The sad thing about working for someone else is that there is a limit on how much you can make every year. Start a business, and there is literally no limit.
The fastest way to get started in business is to use the skills you already have and working on building a side income.
Brainstorm ideas with someone who is working in your industry. Could you do some consulting, start an online shop or write as a freelancer?
Getting business skills can earn you a lot of money, and increase the chances of you getting promoted in your day job if you decide to keep it. Having multiple income streams can be very beneficial: Thomas C Corley found that 65% of the millionaires he studied had at least three streams of income.2
5. Climb The Ladder and Get Paid What You Deserve
Increasing your salary is fast, but it might not be easy. But you might never get a promotion if you don’t ask for one! Sethi points out that a one-time salary increase of $5,000, if properly invested, can make you over a million dollars over a 40 year period!1
To get a promotion, you’ll need to:
- Work within a company that allows you room to grow and move up
- Do the best you can in your current position
- Work on your social skills and relationships with colleagues and superiors (people who are liked the most often get offered the best opportunities!)
- Volunteer for leadership positions, however small
- Tell your supervisor or superiors about your career goals
- Apply for jobs higher up within your company when they become available
- Get educated, more qualified and develop new skills
- Volunteer abroad and take on a leadership role at a volunteer organization to get some experience in roles that involve more responsibility
- Get a mentor or a coach
- Move from company to company every few years or when it’s obvious that you can’t move up.
6. Serve a Million People
It’s so easy to focus on the bottom line, when the process you go through to get there is what you should really be putting your attention on. Find ways to build great value and serve millions of people, and the money will follow, says contributing editor at Inc., Jeff Haden.3
Here is a similar piece of advice for budding millionaires: when you focus on creating more, instead of making more money, you’re more likely to make more money!
Here are some things you might want to create:
- A new product or service that serves your million people
- A book, a song, a movie, a blog or a revolutionary e-course
- A company, a team of staff, a brand
- Excellence in everything you do
8. Track Your Progress and Review Your Goals Consistently
A study performed decades ago at Harvard MBA Business School showed that goal setting directly affects your net worth. A group of students were asked if they had set written goals and created a plan to attain them. Eighty-four percent of the class had set no goals at all, 13% had set written goals but had no concrete plans and 3% of the class had both written goals and concrete plans.4
Ten years later, the 3% who did have written goals and a plan were making ten times as much as the rest of the class.4
So tie yourself down, make some goals, track your progress and review your goals so they reflect your desire to become rich!
9. Build Routines
One way to help you achieve your goals is to build routines that ensure you’ll stay on track. Brandon Turner of Entrepreneur magazine notes that many of the multi-millionaires out there have a morning routine that they are 100% dedicated to.5
Two books Turner recommends include The Mircale Morning by Hal Elrod and The 10X Rule Daily Planner by Grant Cardone.
Turner turned his morning routine upside-down, and quadrupled his income, wrote and published a bestselling real-estate book, lost 10 pounds and bought his dream home. Not bad, huh?!
10. Associate With Those You Want to Emulate
Almost every motivate guru out there states that you’ll be as rich and as successful as the people around you, including author of How Rich People Think, Steve Siebold, a self-made multi-millionaire who has interviewed over a thousand of the world’s wealthiest people over the last 30 years.6
Since we pick up the habits, mindset and strategies of those that surround us, it makes sense that we might get richer by being around more successful people: as Einstein said, consciousness is contagious, and you can learn how people think by observing them and being in their presence.
If you put all these methods into practice and stick to your new, good habits, there’s no reason why you can’t become rich—even a millionaire—during your lifetime. Treat your mistakes as learning experiences as you go, take risks and don’t quit! Good luck! Here’s to your wealth!