Wells Fargo: Millennials Want To Look Rich — 4 Ways They Can Grow Their Wealth
Written by
Marc Guberti
Edited by
Jenna Klaverweiden
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A Wells Fargo study, as reported by Fortune, recently revealed that millennials want to look rich, with 59% saying it’s important to appear financially successful.
“Fake it until you make it” has been around long before millennials, but the trend continues to gain popularity. That could be bad news for people’s finances, as the desire to look rich often pulls people away from actual wealth.
When you try to look rich, you can trick others. However, it is impossible to trick yourself. You know your credit card debt, your income and your ability to cover monthly expenses. Looking rich may feel pleasant in the moment, but it can catch up with people.
Millennials who are looking to grow their wealth and have real riches can use the following strategies.
Live Below Your Means
Living below your means is the antithesis of looking rich, but it’s a basic, time-tested strategy. Melanie Musson, an insurance and finance writer at Clearsurance, explained that living below your means can lead to riches over time.
“Live a lifestyle below what you can. You could max out your paycheck every month and live the highest lifestyle possible, but you’ll never get ahead that way,” she said. “Instead, you need to live below your means so you can invest more. The more you invest, the more wealth you build through interest and multiple income streams.”
Surround Yourself With the Right People
Some people look rich in an effort to impress others. However, some people find themselves in friend groups where everyone is trying to one-up each other. Instead of putting yourself in that situation, find people who will be good for you and your finances.
“Surround yourself with people who you can be comfortable with. Choose mentors who can encourage you to be a good person in every respect,” she said.
Getting out of friend groups where it feels like you have to keep up with the Joneses and finding good mentors in your life can move you closer to your long-term financial goals.
Regularly Invest Your Savings
Saving more money from every paycheck is a big factor that contributes to building wealth, but that’s not the entire battle. Robert R. Johnson, Ph.D., CFA, CAIA, an author and finance professor at Creighton University’s Heider College of Business, explained a key detail people miss when creating their budgets.
“People who want to build actual wealth should budget for savings and invest those savings. Specifically, one should not simply budget and track expenses, but one should budget for savings,” he said. “Berkshire Hathaway Chairman and CEO Warren Buffett is quoted as saying, ‘If you want to make saving a priority, take a look at how you budget. Do not save what is left after spending; instead, spend what is left after saving.'”
Instead of thinking of saving and investing as an afterthought, prioritize it and make a plan. “If one truly wants to make savings a priority, it cannot be a residual — what is left over. It should be a line item on your budget. You don’t successfully build wealth by simply taking what you have left after all your expenses. We accomplish what we prioritize,” Johnson said.
Johnson recommended saving 20% of your earnings. Doing that consistently can help you generate real wealth, and setting an ambitious target will force you to reduce your discretionary expenses.
Create New Income Streams
Most of the people who achieve early financial success don’t get there with the same income. It’s common for people to take on new jobs that offer higher income or create additional income streams.
However, you don’t have to get into a complex industry to create a new income stream. Amanda Henry, author of “The Financial Abundance Blueprint,” shared a few options for boosting your income.
“Leverage your skills to create new income streams. Whether it’s freelancing, consulting or monetizing a hobby, tapping into your expertise can create additional revenue that accelerates your wealth-building journey,” she said.
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