What’s your financial strategy to more wealth?
Most people would laugh off at this question because of being clueless on the answer; hence the same dormant results in their financial freedom.
The bitter truth is, without a personal finance strategy, you are likely to die poor. According to the experts, the average millennial earns $40-$50K annually, and about $20-$40K goes to student debt. Nonetheless, the high succeeding millennial makes more than 7X the average; this is true across all ages. There’s a vast difference between average and above earners.
Once you realize the vast difference, you will get serious with the cash at hand rather than make more money; a common mistake for people who think more money equals financial freedom. While earning more is always the goal, it would be better to manage the money you make. Read on.
As common sense dictates, it takes more time to earn money than to spend it. Most people work for many hours to make money only to spend it all on clothes, new car, house and anything they want.
After making money, people spend it all quickly like it’s nothing. Even though spoiling yourself is worth it, it is not proper to spend everything if you want your account to grow. Better still, you can tick out your desires to less for you to avoid everything of expenditures.
Understand How the Economy Works
If you want to make and maintain wealth, you need to ask yourself such questions;
- When does the interest rate rise?
- When does it also drop?
- What do you know about bonds?
- What is inflation?
- When does inflation occur?
- What’s your market cycle?
- Why do economies collapse?
- What do you understand about debt?
You don’t have to specialize in the economy to understand it all, but it would be better to read books on making money with the economic knowledge and Google answers for the above questions and more.
Do Not Get Into Personal Debt
While there’s nothing wrong with borrowing money, you should know that personal debt will damage your net worth on a high note. For instance, investing significantly like in real estate would require borrowing money from institutions. However, you need to be cautious about the debt rules not to have a heart attack when they start demanding their money.
Conversely, you should avoid bowing money for anything that depreciates. However, in things like investments and even education, borrow carefully, remembering that it is not free, so you must pay.
Save and Save More
Avoid debt to save as much as possible. How you save will depend on age, education, where you live, experience, and more. For instance, it will be hard to buy a house in one location because it is expensive.
Better still, always ensure that you have enough money to invest when you want to hence the need to save even more early enough. Generally, there’s no definite amount to save as this is personal, depending on how much you earn.
The best tip to grow your net worth is to start now. Besides, time is money!