You have probably heard people say they have tried everything under the sun and have given up on the idea of building wealth. Could it be that there is a piece of the puzzle that is still missing? People looking for financial success often want overnight results and they wonder why they are disappointed.
Wealth building is a structured process. Rome was not built in a day and neither will your wealth be. If you are not where you want to be financially, chances are there is still something you do not know, or you have not taken any action on what you already know.
Here are five wealth building secrets of the rich that can bring you closer to your goal:
1. Distinguish between wants and needs
A need is something without which your basic survival is threatened, and includes items like food, shelter and clothing. On the other hand, a want is anything else that catches your fancy.
Modern advertising has distorted this distinction, and as a result, most people tend to spend most of their money on the latest phones, cars, gadgets, and other toys they feel are ‘needs’ they cannot live without.
To build wealth, you need to be able to make a clear distinction between wants and needs. Thereafter, learn to satisfy your needs and procrastinate your wants.
2. Save 10% of every penny you earn
Living from hand to mouth does not get you anywhere in the long run. You can really save if you put your mind to it, irrespective of how much you earn. The moment you start saving 10% and living on 90%, you will hardly feel the difference, yet you are building a savings base. The fact that your savings are growing will give you a comforting feeling.
3. Invest 10% of every penny you earn
After you are comfortable with the 10% savings, you can take the next step of investing another 10% of your income. That still leaves you with 80% of your income to spend. Open a specific bank account for this 10% and call it your financial freedom account. Try not to use this money for anything that is not getting you closer to financial freedom. To make the process easier, you can arrange for your bank to make automatic deductions on a monthly basis.
4. Be patient
Wealth building takes time. A goal worth setting will take you time to achieve. It is often said that if your goals don’t motivate you to get out of bed in the morning, get other goals and if your dreams for the future do not scare you, then they are not big enough.
Learn how to be patient with yourself, the people around you, and the process it takes to become financially successful. Keep learning and work your way to the top. Good time and resource management will help you stay focused.
5. Take responsibility for your retirement planning
Most people these days have realized that expecting the government or their former employer to take care of their financial needs after they have retired is not as certain as it once was. Avoid the entitlement mentality, and take charge of your financial future. Start planning for your retirement right away and you will not be disappointed when retirement approaches.
In order to enjoy sustainable financial success, you need a firm foundation. Believe in yourself and work towards your goal on a regular basis.