There is a myriad of get-rich-quick schemes out there but not all of them are 100 percent reliable. Let’s be honest, very few of them actually are.
The truth is, becoming wealthy – like seriously wealthy – doesn’t happen overnight. Unless you win the lottery, of course. And while money doesn’t buy happiness, it certainly makes life easier.
Here’s how to get rich fast, but in a realistic, achievable way.
How To Get Rich Fast: Is It Really Achievable?
In reality, there is no real way to accumulate a huge amount of wealth overnight. There are a few rare exceptions such as winning the lottery or gaining a fat inheritance. But for most people, it doesn’t happen this way.
It also depends on how you define wealth. What does being rich look like to you? For some people, it’s having enough money to invest in good art, vehicles, and homes.
For others, it’s about being financially comfortable enough to take an annual vacation with the family. Wealth is different for everyone. Making money is all about baby steps. It’s also about diligence, patience, and smart financial decision-making.
Here are a few effective ways to get rich:
Establish an Emergency Fund
Most people would be surprised by how many families live hand-to-mouth each month. The reality is that very few people have the funds or the diligence to save money in an emergency fund each month.
In fact, over 42 percent of people in the U.S. have a savings fund of less than $1,000. The best place to start when trying to build real wealth is by establishing a savings fund that’s loaded with roughly 3-6 months’ worth of expenses.
This is a great way to cover your butt when an emergency does arise and you can avoid plunging yourself into debt, otherwise.
Consider and Cut Back on Expenses
You don’t have to live frugally to become wealthy. But it’s still important to be smart about how and where you spend your money.
In an ideal world, you shouldn’t spend more than you earn in order to grow your wealth. If you can live below your means — it doesn’t have to be by much — you can accumulate wealth over time.
This is why it’s so important to carefully consider your expenses and determine where you can cut back on your spending.
Small changes can make a huge difference. This might look like eating in more often. Cutting back on your electricity bill by switching off lights/appliances you’re not using. Having coffee at home, instead of grabbing a Starbucks.
A little diligence with your spending can go a long way.
Start Investing in Your Retirement
Think you’re too young to start thinking about your retirement? Think again. The younger you start investing your money, the better off you’ll be. You’ll have a far greater chance of becoming rich than those who don’t.
Ideally, you should invest about 15 percent of your total household income into stocks, such as a growth stock mutual fund. Look for stocks that offer a proven track record of growth over time. The aim is slow and steady growth in order to accumulate wealth.
Set Your Children up for Success
How does financing your kid’s dreams make you rich? In short, it helps to lessen the financial burden on you as you get older, which allows your wealth to accumulate.
If you’re at a stage where you have very few debts, except, perhaps a mortgage, it’s time to set up a children’s college fund. Two of the best options include an education savings account (ESA) or a 529 college savings plan.
Think of this as a financial safety net for when your children choose to go to college, or even a trade school. Essentially, you’ll have this huge financial responsibility taken care of ahead of time.
Pay Off Your Home as Soon as Possible
Opting for a longer mortgage repayment plan is always far more enticing. But it’s not always the best option if you want to build real wealth.
Regardless of your mortgage repayment terms, it’s important to try and pay off your home as soon as you can. If you’re at a point in your life where you’re investing and saving money, you might want to use some of this to pay off your home faster.
Once you’re free of mortgage repayments you can put this money back into your savings and investments and watch the dollars roll in. Not only this, but you’ll be debt-free!
Invest Your Extra Cash
Once you get to a point in your life where you have extra money because you’re (mostly) debt free, you need to start investing.
Sure, there are limits on how much you can put into an IRA or your 401(K). But these aren’t your only options for investing. They’re just the best tax-friendly options.
Think about investing your money in a brokerage account. Or, invest in the stock market. You could build an investment portfolio that includes stocks, real estate, and other speculative assets.
A good breakdown is to invest 65, 25, and 10 percent of your money in each, respectively.
Break Into Property Development
If there’s anything that’s worth investing in, it’s real estate.
Owning property is also a great way to establish a passive source of income. The property market is massive. If you have the money, it’s time to start buying, developing, and selling property in order to expand that wealth even further.
Dabbling in the property market does require good money, though. So this is a way to accumulate wealth only if you have funds to play the game. Regardless of this, property ownership is a proven way to grow your wealth over time.
Improve Your Financial Knowledge, Right Here
Growing your personal wealth is all about your financial acumen, i.e. your knowledge of what to do with the money you have. As the saying goes, you need money to make money, but the principle doesn’t quite add up without the right knowledge, either.
Explore the rest of this site for more tips on how to get rich fast and broaden your knowledge of finance, wealth, and more.