Really Want To Build Wealth? Stop Doing These 3 Things
Written by
Caitlyn Moorhead
Edited by
Gary Dudak
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You may not have all the money you want, or even need, but that doesn’t mean you can’t change that with the right adjustments to your spending habits and a few tweaks to your financial plan. However, if you’re like many others, you may not be getting rich because you’re not focusing on the right moves to build wealth.
Here are three things you must stop doing in order to change your financial situation for the better.
Overspending on Unnecessary Things
Your spending habits define your financial security, like whether you are good at building an emergency fund or better at racking up credit card debt. Fortunately, there are ways to balance both your checkbook and your frugal lifestyle by stopping any overspending on nonessentials.
Most people don’t realize that eating out, impulse buying or paying unnecessary delivery fees for convenience all put a serious chokehold on your long-term financial health. Simply put, make sure to pay yourself first before adding to your monthly expenses when you don’t have to.
You can simultaneously break poor habits and start building wealth by tracking your spending, saving for retirement or investing and earning compound interest. Start by identifying the expenses in your life that are not needs. Next, plan to eliminate or decrease these expenses and use the money saved to invest for the future, such as through retirement savings accounts like a 401(k).
Wasting Valuable Time
In many ways, time is in fact money, so unless you win the lottery, you won’t get rich from a single event. Instead, you must build wealth mindfully, strategically and consistently over time — hopefully in a way that is both tax advantaged and earns interest.
For example, investments that appreciate or generate income, like stocks and real estate, are consistently key to success. You can also boost your wealth-building capacity by making yourself more valuable in the job market, or by knowing your worth and asking for a raise regularly.
Focus on really investing your time, energy and sometimes a little money into your personal earning potential. The current economy is volatile, but it is always evolving, and so should you through skill development or improving your financial literacy.
Maximizing your paycheck at your 9-to-5 might not be enough, though. A side gig or setting up a passive income stream can help you become rich, but you may need to put in some extra time over the weekends to reach your short-term and long-term financial goals.
Burning Yourself Out
On the flipside of using your time wisely, advisors will warn you to not get so caught up in trying to get rich that you forget to enjoy the process and burn out before finding success. Paying off debts may not be your favorite way to spend money, but earning, saving and investing are much more important.
So, what can you do if you want to get rich? The answers to why the grind is important may sound obvious at this point, but they are tried and true for a reason. Here are a few key takeaways:
- Find an occupation that you actually will enjoy, where you can grow and increase your earning potential.
- Increase your income through side hustles and passive income streams where your skills and talents can shine.
- Pursue your passions and make them happen, as you are more likely to earn more if you love what you do.
Remember, when you don’t enjoy something, you get burnt out quickly, and you will likely give up before you get rich.
Martin Dasko and Laura Gariepy contributed to the reporting for this article.
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