Money is more than depositing a fat check into the bank account. Money is more than growing your savings. What’s money then? And how to get wealthy? You can comprehend the actual form of money, but only when you stop allowing emotions to influence your financial decisions.
Let me share something with you, something which you are not expecting: rich people never mix emotions with investing or any other financial decision. Their portrayal as emotionless people in movies and TV tropes are valid to some extent.
How To Get Wealthy
Everyone wants to get wealthy, but very few know how to get wealthy. The reason making money remains a dream for the majority is they overestimate money and underestimate themselves. As Warren Buffett once said, “Nothing sedates rationality like large doses of effortless money,” money, effort and ambition should all be in tune with each other for a person to get wealthy.
Here are some effective tips that could help you get wealthy:
Don’t Show Emotion
A human being can never be emotionless. He shouldn’t be so because the role of emotional intelligence in life is immense. That being said, emotions can sabotage your efforts to get wealthy. A shopper once regretted over her decision to purchase an expensive wallet because she later realized she could’ve toured across exotic foreign locations by shelling out the same amount.
She made a wrong decision because she caved into her momentary emotional demand. That’s what happens when you put emotional intelligence over rationality in your pursuit to know how to get wealthy. Don’t be jealous of people with money. Learn how they’ve earned it. Don’t regret poor financial decisions you made in the past, take better decision in the future.
Getting rich overnight should better be a dream. People do become rich overnight, but only a microscopic percentage. The rest have to wait for their turn. If you are young, save for retirement. It’ll take time but you’ll become rich in the end.
For retirement saving, invest in social security but don’t be overly dependent on it. You don’t know how to get wealthy, and you don’t know what senators have in mind either. Congress might announce the plan to cut down on benefits (The GOP candidates are critical about Obamacare already). A Roth IRA adds compound interest to the original amount. The cap for individual contributors is $5,500 and no tax applies when you withdraw it.
A 401(k) and a HSA account can also yield massive return at the time of retirement. 401(k) is a gateway to invest pre-tax money, deposited to your account by your employer. As for the HSA, you can use pre-tax money to pay your medical bills.
Cut Down On Spending
“As you sow, so you reap.” This old saying explains why you should reduce spending. Growing your savings means saving every dime so one day your account has bundles of dollars. If you spend money recklessly without thinking of the future, then your savings will always remain slender and your dream of getting rich will remain a dream.
To reduce monthly spending, you need to create a budget. Budgeting in your 30s and 40s can take care of your finances. When making a budget, define the income and spending tabs clearly. Next, link those two tabs by spending money coming from unstable sources for frivolous purposes and money from stable sources for required utilities.
Check For Resale Value
It’s easy to keep yourself from flimsy purchases. But it’s not easy to stay away from purchasing stuff that you deem useful but whose resale value will depreciate over time. Cars belong in this category. We all drive cars knowing that their resale value would be less than even half of their original value.
Not only cars, electronic goods also fall under this category. Buying such items is sometimes unavoidable, but you have to stop buying them in order to get wealthy. If you keep asking how to get wealthy and purchase products with depreciating value at the same time, your finances will never improve.
#3. Dare To Invest?
I know investing decisions are tough. But when acquiring wealth is your objective, investing is a must for you. Read any book from any self-proclaimed finance guru on how to get wealthy, I bet you’ll find this advice there. Don’t hesitate and start mapping out your investment workarounds.
The stock market and real-estate are both suitable destinations for investment. Investing in real estate doesn’t necessarily require a hefty amount, you can invest in rental properties as an example. Know the basic stock market terms if you want to invest in the stock market.
Investment always involves risks. There’s no guarantee that you’ll get a fabulous return (you may not get any return at all some years). The more you learn about investing, the more calculative approach you take, the higher will be the chances of return.
Don’t be impatient. You need a lot of patience to get wealthy. So be patient, follow the tips shared here and wait for the stroke of luck.
What do you think of this article? What are your strategies to get wealthy? Let us know in the comments
Author Bio: Tina Roth is the owner at Finance Blog – the leading personal finance blog that covers best tips on budget management, frugal living, money saving, credit score improvement and more. She is also a contributing writer at Finance Guest Post – a community for personal finance bloggers.