The process of building wealth, while not easy to do, breaks down into just four steps.
In a Sept. 21 Market Insiders e-newsletter published by money expert Jaspreet Singh, Singh further details how to follow each of these steps as you start the process towards successfully building your wealth.
1. Create a Financial System
Many people think earning more money is the solution to their financial problems. However, Singh writes that unless you have the right financial education, having more money will not make you wealthy.
The savvy approach is to create a financial system based on your current income. This will tell you how much money you can spend, how much you should invest and how much you should save.
2. Grow Your Money
The second step towards building wealth involves growing your money. If you have ever noticed rich people getting richer and wondered how they do it, Singh writes that they have their money working for them.
How do you get your money to work for you? The answer is found through using your money to buy assets. These assets include stocks, real estate and businesses, all designed to continue paying you even when you’re not working.
3. Build New Streams of Income
The third step towards building wealth involves building new streams of income. Singh writes in the e-newsletter that once you know how to invest your money, you’ll want to amplify your investments.
If you want more money, you can either spend less money or earn more money. Those who choose to spend less, Singh writes, will ultimately reach a limit in the amount of expenses they can cut. However, there is no such limit to the amount of money you can earn.
Singh recommends using your time as a tool to generate more income. This allows you to buy more assets and essentially means you’re working to earn more money to invest more money.
4. Protect Yourself Legally and Financially
You created a financial system, bought assets to grow your money and built new income streams. By now, you should be on your way to building wealth.
As you build your wealth, some people will try to take a piece of it for themselves. The final step is to build legal and financial shields. Singh writes this means hiring the right attorneys, accountants and advisors. They will help look out for your best financial interest and protect you both legally and financially.
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