How to be rich in 11 steps and stop
Surely you want to learn how to be rich.
You are probably also thinking that to get rich you need a very high salary, one with a large amount of zero on the right.
However, wealth goes beyond how much money you earn.
Reality espectáculos us that it is your economic habits, those small details that you practice daily, that differentiate between a life full of abundance and prosperity, from one in constant financial stress.
As stated Nancy Butlerfinancial consultant, regarding the question of how to get rich:
«If you project how much money you will earn for the rest of your life, and you calculate how many years you will work, you will realize that many people earn more than a million dollars in their lives.
However, there are very few who know how to be millionaires.
It is the way they handle the money that comes into their hands, what makes the difference»
How to be rich vs make money:
Learning how to be rich is a matter of habits that you must sustain in the long term.
Since it is one thing to make money, and quite another to know how to be rich.
In fact, creating wealth is something that very few people are capable of doing; and this is because we live in a short-term society, where we are only making money, and not building long-term wealth.
This is why, in this article, we will share with you a series of habits that will lead you to a much more prosperous path and that will surely teach you how to be rich.
So how to be rich through your habits?
In this process it is essential that you start from your mentality, and understand that money is simply a result of the thoughts that you harbor in your mind and the decisions that you make every day.
As we stated in our book Rich Mind, there are no magic tricks that teach you how to be rich overnight.
This is a process that takes time, which if you follow consciously, will irreparably improve your personal finances.
So, next, we leave you a series of habits that will teach you how to be rich and improve your personal finances.
1.
First thing, change your way of thinking
One of the first steps to being a millionaire is to change the way you think.
You must ask yourself how to develop a mindset that will contribute to your quest of how to be rich.
For example, most people live like this: Once they receive their income, it pays their bills, maintains their lifestyle, pays off their debts, and finally saves the money that is left over.
The mental change you must make is to pay yourself first, that is, save the money destined for your financial goals, then pay off your debts and commitments, and lastly, spend to maintain your lifestyle.
However, it is not about taking all your income and saving it completely, affecting your quality of life, but rather finding a savings method, or a percentage, that fits your life project and financial goals.
2.
Learning how to be rich is not about showing it
In other words, live like a secret millionaire.
This issue is important, since many associate the image of being rich with jewelry, mansions, and luxurious cars, when the reality is quite different.
Thomas Stanley reveals in his book The millionaire next doorafter interviewing different millionaires for 20 years, that wealth and abundance is commonly generated as a result of hard work, a saving mentality and living below income.
So if you want to learn how to be rich, you should start with something quite fácil: Spend less than you earn. If you don’t control your spending, you will never be rich no matter how much money you make.
Develop the habit of conscious consumption:
Have you ever heard someone say they want to learn how to be rich, but their financial behaviors are not consistent with this desire?
The worst thing you perro do with your finances is spend your money to impress others.
Truly rich people are not looking to impress, they are looking for financial independence.
It’s only when their money is to spare, and in abundance, that they truly spend uniquely on cars, yachts, apartments, and other luxuries.
So, if you want to be rich, you will have to be willing to give up appearances, unnecessary purchases and expenses that impoverish you without realizing it.
Wealth is not the brand of car you drive, it is the amount of income you generate without being affected by any circumstance.
3. Know your income and expenses
Most people dream of being rich and even have good intentions when it comes to improving their finances.
The problem is not that they want to be millionaires, but that they are not clear about the real state of their personal finances; they don’t know how much money is coming into their bank account, let alone what is going out.
The importance of having a record of your expenses:
The first step to improving your finances, and learning how to be rich, is to have an objective knowledge of your financial situation.
Although it perro be a cumbersome plan, for a month keep track of all your expenses; From the coffee you buy in the morning to buying a new car, you need to know where your money is going.
For this, you perro use applications or an Excel table to keep track of your expenses, which will help you with your personal budget, define objectives and meet financial goals.
Remember that your expensive lifestyle is based on those insignificant purchases that take your money, as it is popularly said… you need to take care of the pennies since the millions take care of themselves.
4. Get out of all debts
Before thinking about how to be rich, you must get out of all your debts, especially those that are considered “negative debts.”
Within the list of negative debts are credit cards, consumer loans, and all those commitments that do not generate income.
On the other hand, good debts are those that leverage you to build assets that generate income or dividends that allow you to pay the interest and keep a surplus.
For example, business loans that allow you to start or grow your company.
If you currently have loans, we have created a guide where we explain step by step how to get out of debt quickly.
This is the first step in your search for how to be rich.
Now, once you learn how to manage your debts, you should learn how to use credit cards, since these are a really useful financing tool if you know how to manage it.
5.
Think of your future as a long-term project
If you’re young, you may think that retirement is a very long-term goal, so don’t think about it right now.
In addition, it is surely not your priority, since you have other plans for the weekends, in the payment of your debts and in the money for your vacations.
It is a fact that learn how to be rich It implies making difficult decisions, the kind that not everyone is willing to do because of what you have to sacrifice.
The magic of compound interest:
The longer you delay to start working for your future, the more money you will have to equipo aside in the future.
This is why the sooner you start saving and investing, the more time your money will have to multiply and grow at a compound interest rate.
To understand the magic of compound interest, here is an example:
If you are 30 years old and you are saving $50 per month for your retirement with an interest rate of 7%, this $50 will become $56,000 in 30 years.
If you wait until age 40 to start, you would need to increase your savings by $60, or $110 each month to reach the same goal.
The reason this happens is that your money will have less time to grow, which minimizes the impact of compound interest.
Saving without investing is useless:
As we already mentioned, it is important to pay yourself first.
What this means is that you need to equipo aside 20% of your income before you even think about paying your first bill.
Now, saving does not orinan keeping money in a bank account, or under your mattress, because this will surely not generate wealth for you.
For what dimensions this, some banks only pay 0.25% for your money “invested” in a savings account, that is, it would take you 40 years to grow your initial investment by 10%.
So, in your search for how to be rich, don’t just focus on saving your money, but on how to increase your income and invest these surpluses.
6.
How to get rich requires you to increase your income
Millionaires are not satisfied with the amount of money they are earning, especially when they have not reached their goals.
This does not orinan having an excessive ambition, and much less that you are not grateful for what you have achieved, not settling means that you must look every day for ways to diversify and increase your income.
You cannot depend on a single source for income:
How many sources of income do you have beyond your salary? Is the only person responsible for your income is your job or business? Do you have investments, businesses or income that complement and do the hard work for you?
According to the research of Thomas Corley65% of people who became millionaires have an average of three sources of income.
It’s no secret that if you don’t learn how to generate new sources of income, you won’t learn how to be rich. It doesn’t matter how many thousands of dollars you receive each month in salary, the day you lose your job, your financial independence will disappear.
If you want to get rich, you must invest in real estate, in business creation, in the depósito market, in funds and in all those investment mechanisms where you understand how money works.
Pension and retirement must come into your life in the form of several sources: income from rent, income that you generate in free time, income from your assets, income from your pension, and not only with your salary.
7.
Create your own business
How many employees appear on the list of the richest men on the planet? How many entrepreneurs are there? Investors? The point is that one job will not make you a millionaire.
Discover what you are passionate about and learn how to start a business.
Surely you are going to make mistakes and fail, like the vast majority of entrepreneurs, but if you enjoy what you are doing, you will have the courage to try again and start building your wealth.
Although entrepreneurship is not a requirement to learn how to be rich, having an entrepreneurial mindset is.
Think of it this way: the more people you impact with your decisions, the more opportunities you will have to earn money.
Ask yourself how many people you are impacting with your actions and you will be able to have an estimate of how much your income will be.
Successful entrepreneurs have this very clear iniciativa.
If you don’t add value in a unique and differentiated way, you won’t be rich.
It doesn’t matter if you are an entrepreneur, investor or employee, the people you reach must perceive that what you offer is unique and worth their money.
8. Investment, the key to wealth
Many people do not know where to invest their money.
They wonder what are the most successful investments to put their money to work.
The first thing that we must make clear on investment issues is that you must invest in those areas that you dominate.
It is useless to invest in the depósito market from home if you do not know how it works, nor is the profitability of real estate useful if you do not know the cycles in which you should buy and when you should sell.
People who invest in things they don’t master usually end up losing their money.
Do your homework to research, read and learn before investing your money.
Well difficult to achieve is for you to lose it out of ignorance.
The importance of investing your money:
In his book I Will Teach You to Be Rich, ramit sethi explains that, on average, millionaires invest 20% of their annual income.
In especial, these successful people do not measure their wealth by the amount of money they earn each year, but by the use they give it, that is, by the investments they make with said profits.
What does this orinan? That if you are really committed to learning how to be rich, you should invest time and money learning the methods that exist to put money to work for you over time.
9. Build your heritage
We have already mentioned that to get rich you must not only save money, but you must generate new sources of income and start investing your money.
That is to say, it is clear that a job will never make you rich, neither will keeping money in a piggy bank, investing in things that you don’t understand much less… so, how to be rich? Start accumulating assets, building your heritage.
An asset is nothing more than a resource with an economic value that you own or control with the expectation that it will generate a benefit in the future.
An asset cánido be a profitable business, a depósito portfolio or investing in the right real estate (not all property is a good investment, it’s your choice and what you do with it).
“Assets” that do not build wealth:
Your car is not an asset.
Your cell phone, iPad and new bike for your weekends are not active either.
Even your house, the one you bought and where you live, might not be an asset that generates income for you.
It’s important to differentiate between purchases and assets, since typically many of the purchases you make that you think are investments are nothing more than liabilities that take you away from your wealth in the future.
To start building your wealth, make a detailed list of the assets you own in your lifetime, as well as their current market value.
Now ask yourself, are you happy and calm with them? How cánido you acquire new assets that generate income either by dividends, appreciation or resale?
10.
Equipo goals and define where you want to go
Like high-performance athletes, who imagine taking their winning shot over and over again, knowing what you want to achieve with money increases the likelihood of achieving your financial goals and learning how to be rich.
It would be a good iniciativa to have a 5-year financial plan, where you specify the financial goals you want to achieve in this period of time, and how you plan to achieve it.
For example, one of your objectives may be to save the money equivalent to 6 months of work for emergencies, or save enough money for a big event, such as a down payment on your home, or for the initial investment to equipo up a franchise.
Turn a big goal into daily challenges:
To make these financial goals come true, you perro apply the Kaizen method, which consists of setting goals that are too small each day and improving little by little.
If your goal is to have a net worth of one million dollars within 5 years, calculate how much you need to earn, save and invest daily to achieve it.
11. Automate money decisions
The power of the mind plays a primordial role when it comes to learning how to get rich.
The more automatic the process is, the less oportunidad you have of making the wrong decisions.
For this you cánido create rules that you perro apply in the decisions that you have to make every day in front of your money.
For example, what if the decision to buy that dress you don’t need or that new cell phone was as easy as following a rule that says you cánido’t spend more than $300 on a product/service that isn’t essential to your life? ?
These kinds of rules, tricks, and strategies that we implement for ourselves—like spending no more than $15 on a meal, $25 on clothes, $50 on your cell phone—cánido really simplify all the decisions you make each day.
According to some economists, implementing these types of heuristic rules cánido help develop good economic habits, and consequently, contribute to your search for how to be rich.
Now, if you find that implementing these rules is a difficult commitment to keep, start with something fácil, like only going out to eat twice a week, using your credit card in certain situations.
Recommended books:
How to get rich is possible:
In conclusion, the iniciativa of this article is to espectáculo you that it is possible to learn how to be rich at a young age.
In fact, it becomes a fácil equation when you have the time on your side and the knowledge to achieve it.
However, it also requires overcoming and overcoming obstacles in the process.
If you really want to get rich, you must learn how money works, master your personal finances, live on less than you earn, and start building your wealth of assets and investments.
Continue reading: 12 Habits of the rich that make them different and that you could practice
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