What are the secrets to becoming wealthy? Realistically speaking, you only need a couple of ingredients to build your wealth and have more money. And so the concept of becoming rich is actually quite simple. However, most people struggle with applying these concepts because of a lack of knowledge or discipline and so actually becoming wealthy is more difficult.
Since you are reading this site you are certainly not ‘most’ people. You’re already wealthy in at least one way. You are actively looking for information that will help you become more financially independent, and you have made a step that a lot of people fail to take (congrats, keep it up!). I am confident that you, as a reader, will become more wealthy significantly as long as you are patient and disciplined enough to consistently apply the following, simple rule:
Spend less than you earn, invest the difference and re-invest all dividends.
Living within your means is absolutely necessary if you want to become more wealthy. Money makes you more money. If you have none because you spend it all on silly things you don’t need you will never get to a place where you money makes you more money. If you want to reach financial independence, you have to cut out unnecessary expenses.
Tip : Track all your expenses for a month and cut out all the unimportant and unnecessary expenses from now on.
Increase your monthly income by working as hard and smart as you can within your job. Go out there and prove your boss you are essential for the company. Show him that you are worthy of a promotion and invest all the extra money you earn. Another way to increase your monthly inflow of money is by creating a passive income by creating a website, start an online company or become an affiliate marketer. There are many more ways to build your capital, use your imagination!
Tip : Create your own online business. Whether it is writing an e-book, offering your service on fiverr.com, becoming an Amazon affiliate or building your own website.
Invest The Difference
Invest what one you’ve deducted your expenses from your income. Invest it in stocks, bonds or even real estate. Remember, money makes you more money if you let it work for you. Investing your capital is the way to grow your wealth. And when it comes to investing you are absolutely at the right address.
Tip : First make sure you have a money reserve that covers around 6-12 months of living expenses, than start with investing.
Re-Invest all dividends
An often overlooked aspect of investing is the re-investment of your received dividends. If you receive an additional 2-3% in dividends, re-invest it to let that money grow. Compound interest will do incredible things for your money.
Tip : Check if your broker can re-invest dividends automatically for you.
All in all, the rules to becoming wealthy are quite simple. The trick is that these rules need to be acted upon consistently. It might take some effort in the beginning, but you’ll be happy you started today!