Do you want to be rich? Stupid question, right? Most people would say yes, but unless you win the lottery, increasing your wealth takes effort.
I'm a Financial Advisor: The best advice I would give my younger self is this.
Read more: 3 things to do when your savings reach $50,000
If you want to get on the path to wealth, start building wealth in 2024 with these 18 New Year's resolutions.
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Become more aware of your financial situation
It's obvious that if you want to get rich, you need to know where you stand financially. Certified Financial Planner (CFP) Alicia Petty says people often feel like their financial situation is not good, but they don't want to realize how bad their situation could potentially be. speaks.
“Being aware of your financial situation and keeping it top of mind is the key to improving your finances and increasing your wealth,” Butera says. “Your resolution should be to understand what you have, know where you want to be in the future, and decide how to get there.”
create a realistic budget
This resolution goes hand-in-hand with becoming more aware of your financial situation. To grow your wealth, you need to know where your money is going. But many people often don't, says Therese R. Nicklaus, CFP and Certified Success Principles Coach.
Nicklas recommends using a budgeting app or budget template to document all your daily expenses. Once you've identified your money leaks, you can cut back on those expenses. That may not mean eliminating them and changing your lifestyle, she said.
See if you can reduce your bill by getting better rates from your service provider or shopping around for a better deal. This will give you more room to save in your budget.
“You’d be surprised how the small adjustments add up,” she said.
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I treat my finances like a business
To make more money, commit to treating your personal finances like a business.
“Companies have to abide by this set of rules, or they won't exist,” said Alex Corey, CFP and wealth management advisor at Hosler Wealth Management. “The same principles should apply to people's personal finances. And if we all reviewed our numbers more diligently, we could all make smarter money decisions. It will be like that.”
To treat finances like a business, he said, you need to create a budget, review your monthly income and expenses, create a net worth statement, and make sure you're making a profit.
“That doesn't necessarily mean putting money into the stock market. Invest in yourself through education or look at starting a side hustle.”
I will remain debt free
You can put your money to good use by stashing it in interest-earning accounts or investments rather than throwing it away to pay interest.
“Not relying on credit cards, lines of credit, or debt to live a lifestyle is a proven way to become wealthy,” Nicklas says.
He added that you would be shocked if you added up the amount you are spending on interest. This may motivate you to make a plan to pay off your debt as soon as possible. That way, you have more cash to invest and grow your wealth.
i save money
The easy way to get rich is to keep more money. “When you're frugal, you increase the amount of money you save,” says Tom Corey, author of Rich Habits: The Daily Success Habits of Wealthy Individuals. “The more you save, the more options you have for making money.”
To stop wasting money, Corey says, you need to be conscious about how you spend your money. Check your bank and credit card statements to see how much of your money is going toward things you need and want. Look for ways to minimize your spending on essentials, such as cutting back on unnecessary purchases and shopping for the best deals.
Reduce housing costs, your biggest expense
Take your frugality a step further by cutting your biggest expenses and leaving more money for savings and investments.
“Most people think small when making financial decisions,” says J.D. Roth, founder and editor of the website Get Rich Slowly.
“If you really want to make a difference, you need to think big. There's nothing better to improve your finances than reducing your housing costs,” Ross said.
Housing is the largest expense for U.S. consumers, accounting for an average of one-third of total household spending, according to the Bureau of Labor Statistics.
Ross points out that if you're willing to relocate, the savings can be significant. This might mean moving to a smaller home, a different neighborhood, or a different city with a lower cost of living.
find a mentor
Mentors can help you on your path to wealth by providing advice, career advancement opportunities, and guidance to start or improve your business.
“Mentors teach you success habits, changing beliefs, how to think, how to achieve your goals, specific processes that lead to success, and shortcuts to success,” says Corey.
And they're everywhere – you just have to seek them out, he said. A mentor could be someone in a higher position at work, someone you met through volunteer work, a professor at your school, or a connection you made through a professional organization.
“Make a list of successful people you want to learn from and invite them to breakfast, lunch, or a beer,” says Corey.
Increase contributions to your retirement account
If you want to get rich, you'll need to make an effort to save more.
“The higher this ratio is, the faster you can become wealthy,” Corey says. Among the self-made millionaires he studied in his book, Rich Habits, those who saved more than 10% of their income from the beginning of their careers became wealthy in their 60s. It is said that it had become.
“The people in my study who saved more than 20% were wealthy in their mid-40s,” he added. “The more you save from a young age, the more wealth you accumulate and the faster you can become financially independent.”
save half of your income
If your goal is to grow your assets to retire early, or just get rich faster, you need to save as much money as possible. “I like to encourage people to save half,” Ross says.
More people can do this than you think. For example, if you're married and both of you are working, consider living off one income and saving the other.
“Pick a crazy goal and aim for it every month,” Ross said. “It's okay to miss it at first. Start tweaking your spending until you get closer and closer to your goal.”
save money in smart places
You could be missing out on a great opportunity to earn more money each year with a tax refund. that's right. If Uncle Sam receives a large check each spring, he can deposit the money with Sam interest-free that year.
“People are happy when they get their money back at zero interest,” said Leon Labrecque, CFP at Sequoia Financial Group. “If they had stashed their income tax refunds in a 401(k), they could have kept that money, saved on taxes, and potentially profited in the market.”
You can fill out the W-4 form to adjust your tax withholding and receive more money in your paycheck.
Understand and learn how to manage risk
If you want to get rich, you need to be willing to take some risks.
Ray Benton, a certified financial planner at the University of Lincoln, says, “We know that wealthy people take above-average (but not frivolous) investment risks more often, and they generally understand the risks.'' , and understand the risk and return characteristics of investments.” Denver financial advisor.
That doesn't mean you should invest all your money in the stock market. However, if you avoid risk by sticking to safe investments such as money market accounts, your money won't grow as much because these accounts have low interest rates. Pledge to understand and learn how to manage risk and overcome your fear of investing.
I get paid what I'm worth
Bridget Grimes, founder and president of Wealth Choice, a San Diego-based financial planning firm focused on women, says she vows to use her work more financially to get rich.
“This means making sure you're getting paid what you're worth,” Grimes said, and that includes both salary and benefits.
To find out the average salary for someone in your position, check out websites like Payscale, Salary.com, and Glassdoor. If you feel you're underpaid and underpaid for your benefits, insist on a raise. If you can't advance financially in your current job, Grimes advised, “make a plan to get another job that will benefit you financially.”
create an additional source of income
Consider a side job or side job. There are many part-time jobs to earn more money.
“If you're like most people, you have one source of income: your job,” Corey says. “And if you're like most people, you're either poor or stuck in the middle class. If you want to get out of poverty and out of the middle class, you need to start creating multiple sources of income.”
Use the extra cash to quickly eliminate debt, invest in stocks and other assets, or put it into savings. You can use this to start your own business or buy rental properties to earn more income streams.
Pursue your passion to earn more money
According to Corey, passion is a key ingredient to becoming rich. “It's the catalyst that turns ordinary individuals into self-made millionaires,” he says. “When you pursue something you are truly passionate about, you manage to find the time to do it.”
So this year, find out what you're passionate about and resolve to spend time cultivating that passion. That might mean reading books on the subject, taking courses to improve skills related to your passion, or writing a business plan and pursuing funding.
“You have to take action and invest in yourself today to create the future life you want,” Corey said.
increase bandwidth
You can increase your wealth by increasing your bandwidth. “Bandwidth is determined by what you do,” Labrecque says. “Everything we do, we choose not to do anything else.”
For example, paying a bill costs money and time to send and send stamps. But setting up automatic bill payments can free up time and a little money, Labrecque says.
Labrecque suggests vowing to find ways to spend less time at boring jobs in order to have more time learning new skills and hacks to increase your income.
Ensure you have adequate and affordable insurance
Always check your insurance policy to ensure it is up to date and has sufficient coverage. “Nothing hinders wealth growth more than a huge uninsured loss,” says Mark Smith, an independent financial advisor and founder of Vision Wealth Planning in Glen Allen, Virginia.
Also, be careful not to pay more insurance premiums than necessary. “Purchasing auto, home and umbrella insurance on a regular basis can lead to substantial savings that can be added to your investments,” Smith said.
i take responsibility
It's one thing to vow to take steps to become rich. It is another thing to stick to your resolutions. You can increase your chances of success by letting others know about your goals.
“One of the key elements to improving your financial health is being accountable,” says Selina Shu, wealth advisor at Delta Community Retirement and Investment Services. “If you can't take responsibility for yourself, share your goals with someone you trust.”
Perhaps you know someone who is also trying to get ahead financially and needs an accountability partner. “If you share your financial goals, you can encourage each other to reach your goals,” says Shu.
ask for help when needed
Wealthy people often have help to increase their wealth, so don't think asking for help is a sign of weakness. Instead, resolve to reach out to people who can help you achieve your goals.
“Most people who become financially wealthy do so by asking for help from others,” Smith added. “Mark Zuckerberg didn't build Facebook alone.”
Whether it means finding investors to help you get your business off the ground or hiring a financial planner to help you manage your money, getting help will help you reach your goals faster. Helpful.
Laura Beck contributed reporting to this article.
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This article was originally published on GOBankingRates.com: 18 Solutions to Make You Rich in 2024
