Becoming a millionaire is not necessarily related to the income you earn but, rather, your willingness and discipline to take a path that leads to a monetarily enriching career and how you manage the money you earn, save, and invest. This article does just that, setting out 13 steps that, if all are followed diligently, will go a long way to helping you get rich. You will end up with wealth beyond what your income and lifestyle suggest. I did!
- Get an education
- Find a mentor
- Choose a career that pays well
- Network constantly
- Change jobs to climb the career ladder
- Pay yourself first! Save 15-20% each month
- Take advantage of the miracle of compound interest
- Make a monthly budget
- Keep track of your expenses
- Don’t get into any new debt
- Pay off any current debts quickly
- Avoid an extravagant lifestyle
Get Educated
Whether it’s a four-year college or vocational training, it’s easier to get rich with an education under your belt. During the early stages of a career, employers largely judge you based on your educational background and,, having that background, will enable you to get a higher salary at the start of your career and in the long run.
Find A Mentor
Find a mentor who can help you build valuable career skills. Mentors are experienced professionals who know a lot about their fields and can help you get a head start in your career through extra training and along the way with their advice.
Choose a Career That Pays Well
Study salary surveys indicating the average annual incomes for specific professions; your odds of getting rich increase when you pick a high-paying career.
Network Constantly
Toot your horn and sell your capabilities and successes to individuals who might be able to advance your career or even help you find a new job. Don’t be shy, don’t be humble—promote yourself at every opportunity!
Change Jobs to Grow Your Career
Once you’ve gotten some experience under your belt, consider finding a new, better-paying job in the same industry. By changing your environment, you can increase your pay and experience different corporate cultures. Don’t be afraid to do this several times! If you’re a valued employee, your current employer may offer you a raise or other benefits to keep you.
Pay Yourself First! Save 15-20%
Pay yourself first! Every time you get paid, invest 15% to 20% be they conservative cash deposit certificates or a well researched exchange traded fund (ETF). My “Lorimer’s Select ETF Portfolio”, for example, is UP 25% YTD, with some constituents UP +30% (see here) and don’t touch it. Getting rich usually isn’t an immediate process; it’s the result of dedicating saving, budgeting, and investing. The more you save now, the more you’ll have later!
Take Advantage of the Miracle Of Compound Interest
Buying fun things with the leftover money in your paychecks can be tempting, but focusing on savings can help you get rich in the long run, thanks to compound interest.
Albert Einstein once said that compound interest is the eighth wonder of the world yet, sadly, many people do not fully understand the power behind it. If they did, they might make smarter financial choices and immediately see their finances improve. Go here to read this post, which will walk you through the basics of compound interest and show you why you need to start taking advantage of its incredible power. this post, lays out why starting to save early in your career is critical to increasing your wealth.
Make a Monthly Budget
Create a monthly budget that covers all of your basic expenses and planned savings as illustrated above while leaving a little bit of “fun” money aside if possible. Sticking by your budget and saving 15-20% of your paycheck each month is a good way to lay the groundwork for your efforts to get rich.
Track Your Expenses
Tracking your expenses is crucial to cutting costs efficiently and adhering to your monthly budget. The closer you monitor your personal spending, the easier it’ll be to stick to the budget and build your wealth!
Don’t Get Into Debt
Debt will drain your bank account making it difficult to get rich . If you use a credit card pay off the balance 100% every month to gain interest-free credit and avoid late fees.. If that is difficult to do then realize that you are living beyond your means and adjust your spending habits accordingly.
Get Rid of Any Current Debt
If you have any debt, make paying it off one of your top financial priorities. Don’t mortgage your home “purchase” to the hilt. Leave some wiggle room in case the interest rate goes up, you encounter unexpected maintenance expenses are increased condo fees condo fees, or you or your spouse becomes unemployed. Consider refinancing your home if you have a large 30-year mortgage, take on a 15-year mortgage instead. That way, you can pay off your debt faster and save money by paying fewer interest fees.
Open A Retirement Savings Account
Americans can take advantage of the traditional IRA, and Canadians the Registered Retirement Savings Account (RRSP) which are tax-deferred investments that delays the tax hit until you withdraw the funds in retirement. You may be able to deduct your IRA contribution from your taxable income depending on your income level and whether you or your spouse is covered by a retirement plan at work.
Avoid An Extravagant Lifestyle
Live a modest lifestyle. As you start accumulating more money from your, savings, and investments, spending more money and living a more extravagant lifestyle can be tempting but the easiest way to maintain wealth and get rich is to resist that urge and continue saving and investing more.
Simple things like reducing the number of times you eat out or visit Starbucks can end up saving you a ton of money. If you’re looking for dramatic ways to reduce your living expenses, consider downgrading your car or house. You might be able to make do with an apartment instead of a house or buy a used car instead of a new one.
Conclusion
Now that you know how to get wealthy go out and do so – now. It’s never too late!
