5 Game-Changing Steps To Grow Your Wealth Significantly
Written by
Joel Lim
Edited by
Amber Barkley
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Regardless of your age, current income or savings, you can grow your wealth significantly in a relatively short time. There is a myth that you have to have money to make money, but that’s not true. If you have a source of income and a safe place to live, you can start small and see real change quickly.
The first and most important part of growing wealth is to change your mindset. As virtually every expert on the topic will tell you, you have to let go of the idea that you’re poor, that you’ll never get ahead, and all other limitations.
Once you have the mindset, here are five game-changing steps to grow your wealth significantly.
Budget for and Automate Investing
You may have a budget for spending, but you also need a budget for investing.
Financial advisor Andrew Lokenauth said, “Start with just 10% of your income — you can totally handle that! — and gradually increase it over time.”
Basically, start with the smallest amount you can live without, then, as you work toward living below your means and raising your income, you can build on that.
But don’t just think you’ll “set aside” 10% of every paycheck. You won’t. People typically spend the money in their accounts, especially since you can just swipe a card. Before you know it, your account is empty, and you’re waiting for your next paycheck.
Don’t fall into this trap. Instead, automate your investing. Set up auto transfer or direct deposit from your bank account or paycheck to go right to your investment account. Then, get those funds into investments before you can spend them.
If you can’t see the money, and if it’s hard to access, you’re less likely to spend it on things you don’t need.
Raise Your Expectations and Your Income
People who ask for more money often get it, but if you don’t ask, you’re far less likely to be offered a raise. It’s really that simple.
If you never ask for a raise, you’re doing yourself a disservice. It’s likely there’s someone out there making more than you for the same job, because you didn’t ask.
Lokenauth said, “Don’t be shy about asking for raises — you’re probably worth more than you think!”
Pick Up a Side Gig
You’ve likely heard this advice before: Get a side hustle. There’s a reason for that, beyond just making more money.
While you’re working, you’re probably not spending extra money. Plus, you may find yourself building skills and relationships that can help you transition to a more lucrative career. At the very least, you can earn a few extra hundred or thousand bucks to invest.
You could do anything from mowing people’s lawns on weekends to helping people with home improvements. You could start your own blog, or you might sell products on Amazon or Etsy. Walking dogs or tutoring can be lucrative. And if none of those are your cup of tea, there are endless ideas.
Look at your skill set and what you’re passionate about, and find someone who will pay you for them. There are definitely people out there who will.
Take the money you make from your side hustle and either reinvest it in your growing business and education or invest it in assets. Both will help you build your wealth.
Get Rid of Bad Debt
Building wealth isn’t just about your assets — it’s time to take a good, hard look at your liabilities. Pay down your bad debt.
Bad debt is debt that doesn’t make you any money, like credit cards with balances. Even car loans can be considered bad debt if the interest rates are high enough.
If you can’t pay off your credit card balance every month, you should not be using it. If you can’t afford to make your car payment and still put away at least 10% of your money in investments, you have too much car. Get out of those debts and start putting your money into assets.
Loretta Kilday, spokesperson at Debt Consolidation Care, who has 36 years of experience in financial planning, said, “Prioritize your expenditures mainly towards strategies that will help you build your assets instead of taking steps that are costing you money. If you have high-interest debt from credit cards or other sources, focus on paying those off at the earliest time, as well.”
This is a big part of living below your means. You don’t need fancy cars and a big house if you’re not growing your wealth at the same time.
Buy Land — They’re Not Making More
Finally, consider the advice of American author Mark Twain: “Buy land, they’re not making it anymore.” Real estate is one of the smartest investments you can make, and a mortgage is a type of good debt, because it can make you money thought rent or appreciation.
Some investors and financial experts argue that buying your own home may not be the smartest investment decision, because it appreciates so slowly over time and can be more of a burden than an asset.
But few financial advisors would advise you against investing in real estate for the purpose of making money. This means development, rental properties, Airbnbs, etc. The property you have that makes you money is a smart investment, because your renters will pay your mortgage for you, and, in the end, you’ll own a tangible asset that will hold its value.
Start taking these steps toward growing your wealth today, and watch how quickly your life — and your portfolio — can change. You could be an entirely different, and more wealthy, person by this time next year!
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