It’s true there’s a difference between rich people and the rest of us. People can become “inadvertently” rich for many reasons: inheritance, family money, winning the lottery, or luck with some awesome stock pick or cool new invention. But it merits pointing out that those “self-made” souls have quite a bit in common when it comes to true wealth building. There’s a mindset of sorts, and if you want to build wealth, it pays to train your brain – literally!
Rule #1: Keep an Open Mind
According to Ryan D’Agostino, author of the book Rich Like Them, the mind of a millionaire never sleeps. D’Agostino went door-to-door in the richest neighborhoods in the Unites States and asked hundreds of rich people how they got where they were. The most common answer? They all thought outside the box – and acted on their ideas.
It’s one thing to come up with the next big idea, but it’s quite another to follow through. That’s what separates those who make it from those who don’t: action.
Rule #2: Understand Math
It seems simple on the outside, but you’d be surprised how many people don’t know the basics of compound interest. Get a handle on that, and you’ll build wealth over time – guaranteed.
Rule #3: Put Your Retirement First
Too many people get caught in the trap of putting things like saving for college ahead of their retirement savings. You can’t take out a government loan to fund your retirement, so retirement needs to be objective numero uno when mapping out your financial future.
Rule #4: Treat Your Time like Gold
Remember, if you truly want to build wealth, time is your greatest asset. This works two ways – first, leveraging time by investing your money as early in your life as possible will maximize the power of compound interest.
Second, the time you spend working is immensely valuable. Stepping back to evaluate what your long-term goals are for your work life is imperative if you want to scale your efforts for long-term success.
Rule #5: Understand Assets vs. Liabilities
This is yet another simple idea that many people think they have a grasp on – even though they often don’t. Buying expensive items that will depreciate in value – clothes, tablets, and smartphones, for example – may make you happy right now, but they won’t earn for you down the road.
When you aspire to make large purchases, stick with safe stocks, other investments, real estate, and the like. That way, you’ll have something to show for your money years down the road.
Rule #6: Habitually Save
Another easy one – turn saving your money into a habit and grow wealthy. Every time you get a paycheck, make it standard practice to sock some money into savings and investments as if you were paying a bill. In fact, consider it a bill. Once you create a habit for yourself, it will stay with you for the rest of your life.
Rule #7: Keep Up with the Trends
Any savvy saver knows that the best way to build wealth is to stay vigilant. Keep up with the market news, financial info, and other money-related matters constantly. When you bury your head in the sand, you miss opportunities. Stay abreast of the latest changes to maximize your chances of capitalizing on the next big thing.