Probably one of the most seductive wishes of the whole population over the world, is becoming wealthy – no matter their culture or origin, but it is no easy task and certainly doesn’t happen in a day. It takes a lot more than most people are willing to do, endure or give away and involves a lot of discipline, long term vision, critical thinking and a surprising dose of common sense.
No circumstance in this world will make you rich by itself alone if you don’t work towards that goal. That includes respecting some key ‘rules’ of success when it comes to accumulating wealth, though there is no straightforward solution that will make you rich in no time. There are certain habits and patterns that have been observed over and over again at people who have already become wealthy. And so, here are 10 golden rules to get rich and grow wealth.
1. Build Discipline
The first and most important part of building wealth is discipline. Without it, no matter how much money you make, wealth won’t accumulate. Would you like money? Earn them! Discipline yourself and earn your way to the top. Nobody will come begging to give you their money for nothing.
Most rich people are disciplined individuals who manage to keep their spending low as their incomes grow. You won’t see them driving around in a Porsche, wasting their time away and going on shopping sprees. You won’t see them, because they’re disciplined enough to not fall prey to that stereotype. They’ll just keep working their way to the top. So keep this in mind and build discipline! The only one preventing you from becoming rich is yourself. So stop finding excuses and start making money.
2. Save! Save! Save!
There is this quote going around for quite a while now. Carpe diem. Live the moment. But most people get it wrong. They stop caring about tomorrow and live only for the present moment. If you ever want to get rich, you need to start saving money. Pay yourself first by making sure you set aside some money every month. And that before you start paying anything or anyone else. Nobody will give you money just like that, but everybody will ask for some. So make yourself a favor and give yourself money first, before everyone else starts asking for them.
It’s recommended you set aside at least 10% of your monthly income or paycheck to a savings account that you won’t touch. If you can, save even more, but never stop saving. There are countless examples in the world, of celebrities who’ve started making loads of money just to go bankrupt soon after. Try not to be one of them!
3. Always, Always Spend Less Than You Earn
This rule is tied to the first two. You need discipline and you need to save money. But at the same time you need to rethink your spending. Never spend more than you earn is a rule of thumb.
If you’re one of those people who lives from paycheck to paycheck, well, you need to rethink and optimize your spending. It’s ok to buy a new car, but first make sure you really need it and that you afford it. Some billionaires out there even recommend to only buy something when you have ten times the amount of the money required for it. Also make sure you get the best price for the deal, and that means to start thinking a little bit before you buy anything.
Think first, spend later. And never ever spend more than you make. Or make sure you make more than you spend. And no, debt doesn’t count. Using other people’s money to pay for something you can’t afford yet is never a good deal. Unless you’re 110% sure it’s going to bring you more money than you have to pay back.
4. Learn How Not To Lose Money
Another priority on your list should be learning how not to lose (too much) money. And the biggest minus on most people’s incomes are taxes. Take advantage and learn how to minimize taxes and fees. There are all kinds of actions you can take to minimize what government takes away from you every year.
Avoid losing money as much as possible. It’s better to spend some time – even if you don’t like it (remember discipline?) – to understand how something works and pay less money than to pay more by default. It can be your retirement account or a business model, but it always pays off to understand it. Also, make sure you read everything before you sign a paper, because there are fees – most of them hidden – everywhere. Most people are unaware of them, which means they’re unaware of the fact that institutions, companies or other people are drawing money from their accounts month after month.
5. Invest and Make Money Work For You
So, you got disciplined and started saving money, you almost never spend more than you earn and you’ve got some tips on how to pay less money on taxes. The next step is to make money work for you, and that means investing. Start treating money like a tool, because that’s what they are.
Take advantage of the power of compound interest. That means interest to interest, which further translates to the fact that the interest you’d get after one year will increase with each passing year. After 20 or 30 years that would mean a lot. Start leveraging your money and use less and less effort to produce more.
Yes, it’s important to live each moment of your life like it’s the last, but we all know it’s probably not going to be the last. Chances are you won’t die tomorrow, so start investing.
6. Surround Yourself With People Better Than You
This one is similar with investing, but instead of money, you’d be investing time and energy. Always surround yourself with people – from your spouse to your friends, subordinates and co-workers – that are smarter or better than you in all aspects of life.
Let’s face it. You can’t know everything and you’ll be long gone from Earth before you’ll manage to learn everything there is to learn. So make sure you stick around people who’ll teach you or help you with something that you don’t have the time or means to do by yourself. Go for a smart wife or husband, for a well-informed subordinate or for a realistic business partner. Get yourself a mentor too. Everyone can help you in some way. If they don’t, if they drag you down, they need to go. You need to keep a distance.
7. Take Measured Risks
You can’t win if you don’t play – it’s a general rule of life. So go out there and take some risks, because without them, there will be no rewards coming in. If you fail, learn your lessons and continue, but never be afraid to take risks.
And when we’re talking about risks, we’re talking about calculated risks. You have to be wise enough not to jump from an airplane without a parachute on your back. Not every risk is a good one or has the potential to give you back rewards, so make a choice, but make it a conscious and deliberate one.
8. Take Care of Yourself First
Another investment you’ll have to make is in your well-being. And don’t ever expect that someone else will take care of it. You have to do it yourself, and you have to do it early. It’s like on a battlefield. If you’re not safe and sound, you can’t save your teammate. So before taking care of others, make sure you take care of yourself first. Generosity isn’t a quality if it ruins your life.
Also, make sure you get you and your family’s health in order. Get health and life insurance and save some money for unforeseen consequences. As we all know, life has its surprises and it’s better to be caught ready than to put in jeopardy everything you’ve accumulated until that very moment.
9. Knowledge is Key
Too important key aspect to be rich and build wealth is knowledge. Before you do anything with your money, you need to first understand what you’re doing, to understand how the process works. Learn all the details of a business or a financial instrument or get someone who understands all that to help you make the right decision.
On the other hand, you have to be aware that too much information or the wrong information can also lead to losses or failure, so sometimes, less can be more on this aspect. Most often than not, news are a bad source of information and can even cause you to have a wrong emotional reaction which can further lead to a bad decision. Be wise and use information the right way and at the right time.
10. Take it Step by Step
During the last decade, everything has been accelerated. You can see it everywhere in society, especially with young people. It’s all about the next gadget, the next amazing vacation, the next paycheck, always the next big thing and never about getting through the grind now. But you have to understand that building wealth takes time. It’s not going to happen overnight, so you need to arm yourself with discipline and patience.
It’s ok to go slow and take it step by step. It’s actually recommended. Why do you think that most millionaires are well into their 50’s or 60’s and that there are so damn few of them under the age of 30? Because it takes time and these 10 golden rules of becoming wealthy.