Everything requires work, and somethings require a little bit of effort. However, the real truth to how the rich get rich is even simpler than that!
I was once obsessed with the idea that I like to call ” privileged situations “.. by this I mean that I often had conversations with myself about how I to think of something as good as Jeff Bezos Amazon or Mark Zuckerberg’s Facebook. However, after awhile of thinking about this I started to believe that the real truth to why Besos he was successful was because of a mix of product luck and privilege. For example, it’s no secret Jeff received a $250,000 loan from his parents for Amazon in it’s early days. He also knew of incredibly successful internet companies due to the fact that he worked at a Hedge-Fund where he managed many internet companies . However, as I get older. This way of thinking has shown itself to be negative and flat-out wrong. You don’t have to be lucky to get rich. And I’m going to tell you why below!
1. Invest while you can when you can
The power of compound interest is no joke! In 2019 alone if you would have invested $5000 into the S&P 500 you would have made X dollars by now! Compare that to the alternative of a banks savings account which at this writing is almost so low it might as well be 0. Now, don’t go wild and invest all of your money into high-risk penny stocks. Stocks are a conversation for a different date. However, if you can invest a little bit each month into a stable index fund you will surely start to see your money grow! I would suggest investing the money immediate after you are paid. Once you invest it, it removes the temptation to spend and if money runs low, it’s not dipped into. Saving your future self from doing present your future a disservice!
2. Getting a Raise or Getting a Job
We could all use a raise, but I will be honest not of all of use necessarily deserve one! Now, the reason a raise is important is because this gives you more money. More money you can either invest with or save. The steps to getting a raise are actually simple.
- Make Yourself Indispensable
- Work hard
The last step may seem obvious, but you wouldn’t believe the amount of people that don’t get raises because they don’t ask. A key reason people get raises is because they are valuable. If you are able to do something no other employee can this helps your chances greatly! Plus, going after this goal of becoming more valuable will help in future jobs as well.
3. Avoid Get-Rich-Schemes
The world is full of “Get Rich Fast” ideas that are almost always wrong and misleading and almost always put those that don’t know any better deeper and deeper in debt. To avoid these scams it has always helped me to think of them as scammers actual business. As in, the person selling you this scheme, for them, the scheme is actually the business they’re selling and they don’t make any money on the product they’re selling you, hence you are the product! There is no way around hard work. But believe me people will try to tell you there is! This article is about getting rich the fool-proof way. No bells or whistles attached.
4. Cut the Credit Card
I am 28 years old as of this year and i am proud to save I have never had a credit card. The reason for this is simple. I have always avoided giving myself the temptation for excess spending. The debit card I have is allotted $400 a month to live on after fixed expenses are covered and after this goes to zero. I try to figure out how to make it through to the next month even if I don’t have to. Keep in mind I could easily spend more than this but to me, this makes budgeting less stressful as I work with the cap I provide myself. It will train you self-control, keep your excess spending down, and make you think harder about what you buy. All win-wins in my mind.
5. Search for a High-Interest Savings Account
I am going to be perfectly honest with you, the bank you are using most likely sucks. They have high hidden fees, purchase minimums and almost 0% interest rate. This is why it is imperative that you find a bank that is competitive in the market for your hard earned money. I currently am a proud Ally Bank user. When I joined their service 2 years ago they were issuing 2.1% interest on savings accounts. Now, the interest has dropped because the FEDs rate decreases but, it is still higher than the national average sitting at .8% interest. In a normal time outside of a global pandemic it is always worth placing your money somewhere that cares and that is also stable as projected inflation is excepted to rise soon and as long as your money is sitting in a low interest savings account you are losing money daily.
6. Practice Self-Limiting
I touched on this topic a little bit above but it is good to refresh and end the article with. I have always viewed saving money as a form of meditation. Calming down and not buying that expensive grill or handbag you might want shouldn’t be viewed as bad or stressful. It is an exercise in letting go. Day in and Day out we are blasted with people telling us to buy things. If you can take a step back and see that it is all noise it will actually be within your power to enjoy not buying the TV or not buying the expensive wallet. This in turn will help you save more money that you can then invest, save or give to those that need it.
The key points are simple. Start investing today, reduce your spending on credit cards, and find a high interest savings account. Avoid paying any money to those that tell you they have the answers and learn to enjoy not spending. I assure you if you can adopt these practice you will make more money, and you will be on your way to your millionaire goals!