6 Boring Ways To Get Rich and Why Boring Is Better
Written by
Emily Fowler
Edited by
Rebekah Evans
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Get-rich-quick schemes may sound great, but they fail more often than they succeed. Flashy investment strategies, risky business ventures and chasing trends can lead to stress, losses and even financial ruin.
Real wealth comes more often than not from discipline, patience and predictable strategies. Boring doesn’t mean ineffective. It means reliable, repeatable and proven over time.
The least exciting wealth-building methods are often the most effective and here are six to consider.
Investing In Index Funds
Picking stocks feels like a game but most people lose. Actively managed funds charge high fees and still struggle to beat the market. Index funds require no effort and deliver better results. They spread risk across hundreds of companies, providing steady long-term growth. While others ride the emotional rollercoaster of stock picking, index fund investors let compounding do the heavy lifting.
For example, according to Money.com, the S&P 500 has grown an average of 10.52% per year for 30 years, while a fund that tracks it, the SPDR S&P 500 Trust (SPY), has risen 1,180% since 1993. The Nasdaq Composite has been more volatile but still averaged 10.9% yearly over 20 years, with a fund tracking it, ONEQ, growing 823% since 2003.
Buying and Holding Real Estate
House flipping looks glamorous, but the real money in real estate comes from buying and holding, something that millionaire “Shark Tank” star and real estate mogul Barbara Corcoran told Realtor.com was “a very slow way to get very, very rich.”
Property values tend to rise over time and rental income provides steady cash flow. Long-term real estate investors don’t waste money on rushed renovations or risky flips and while flipping can bring in quick profits, slow and steady often wins the race in the real estate world.
Automated Savings
The process of manually putting money into savings cab take effort that many people don’t want to put in, whereas automated savings eliminate the decision-making process. Setting up automatic transfers into investment accounts may not be the most exciting of “get rich” schemes, but it makes sure money is saved before it can be spent. It’s a habit that some might say is boring, but a habit that builds wealth consistently nonetheless.
Dividend Investing
Dividend stocks don’t promise overnight gains but they deliver steady income. Instead of just chasing stocks that may (or may not) skyrocket, smart investors set up dividend reinvestment plans or DRIPs. A DRIP automatically reinvests dividends from stocks and funds, turning even small investments into wealth over time.
For example, according to Charles Shwab, a hypothetical $100,000 investment in a fund tracking the S&P 500® Index in 1990 would have grown to over $2.1 million by 2022 with reinvested dividends, but only $1.1 million without.
Avoiding Unnecessary Debt
Debt, although sometimes beneficial, can drain cash flow and limit financial flexibility. Car loans, credit card balances and personal debt eat away at long-term wealth. The key is to avoid unnecessary debt, so more money can stay invested and grow. Keeping liabilities low creates financial stability and security.
Sticking To a Plan
Getting distracted by trendy investments and viral stock tips or making decisions based on fear or panic, can wreck financial progress. Wealth grows more solidly through consistent disciplined strategies. Long-term investors don’t panic during market dips or chase the latest hot trend. They create a plan, stick to it and let time do the work.
Boring strategies may not make for exciting stories, but what they do is create lasting financial freedom. Flashy risks lead to stress, losses and instability while patience and discipline lead to wealth. Building slowly and predictably beats gambling every time.
More From GOBankingRates
