If only there were a secret formula for how to get rich. Almost all of us would like one day to become rich. We would want to be rich so we can provide a better life and future for ourselves and families.
What does it mean to be rich? Before we get into how to get rich, let’s define it so we are on the same page.
Becoming rich simply means that you have just enough money not to worry, or have enough money to quit your 9 to 5 job.
It can also mean that you have freedom from financial stress for the rest of your life. Who would not want these things! If you really want to get rich, you may want work with a financial advisor to help you put together a financial plan.
Being rich and having money doesn’t necessarily mean you will be happy all the time. Rich or poor, we’re all have problems. That’s just part of life.
But one thing for sure is that money can buy freedom to choose. It can buy you protection and hard goods.
If you’re looking to learn how to get rich quick, then this article is not for you. Unless you win the lottery or inherit a massive estate, there are no ways to get rich fast.
If you want to get rich, you have to work hard for it. If it was easy, then everyone would be rich. So you must be willing to put in long hours.
This article is a way to get rich surely and safely. You will find some of the ways to get rich easy, and some difficult, but all of them are certainly attainable.
In this ‘how to get rich’ article, we will discuss 13 steps that you can take right now to make your dream of becoming rich a reality.
Related Articles on How to get rich:
- How to Grow Your Wealth
- 9 Reasons Why You Will Never be Rich
- 5 Money Tips to Make You Rich in 2018
- 5 Passive Income Streams That Will Make You Rich
How to Get Rich Surely and Safely – Here Are the Ways to Get Rich.
1. How to Get Rich – Planning to Get Rich.
Why do you want to be rich? To what purpose?
Becoming rich is not random; it just doesn’t happen. As I said earlier, unless you win the lottery or inherit some money, you have to plan it.
Planning, both short term and long term, is essential to get rich.
Depending on your goals, you might consider getting financial advice. Regardless, have a set of goals and a realistic plan on how you expect to achieve your wealth. That way you have a blueprint in which to measure your progress.
2. Have a Millionaire Mentality.
Another secret on how to get rich is to have a millionaire mentality. In fact it is one of the things that separates the rich from everyone else is (their mentality, i.e., the way they think about money and its use and its value.)
Let’s take an example: the poor buys the hottest thing that hits the market. He or she never has more than $50 around the house and his or her checking account always drops below zero before the next paycheck comes in. He’s always broke.
He has no savings. He hasn’t saved for retirement. And if his employer has a 401k plan, he doesn’t participate.
This is not how to get rich.
Now, the rich has a way different mentality. He or she does the opposite of what the poor man does, meaning he or she saves and invests his money; has money work for them.
Although, he can afford things, he believes in frugality. He is goal oriented. If he sees something that he wants, he plans and takes steps to get it.
So in order to get rich, you need to develop the attitude and habits that are necessary to become wealthy. Learn more about how to get rich by having the right mindset.
3. Invest in Yourself.
An essential step on how to get rich is to invest in yourself. As Warren Buffett once said: “the most important investment you can make is in yourself.” So try to get a good education and choose a career that has the potential to make you rich.
For example, a career in law or medicine or in business has the potential to make you a lot of money. Whereas a career in education has very little potential.
If you think you’ve reached the maximum salary in your field, then consider starting a side hustle like starting a blog to earn extra income. From completing surveys to driving Uber, there are several ways to make money to supplement your income.
4. Budget Your Expenses.
One of the things you need to do in your wealth building effort is to budget your expenses. Some people have no clue where their money goes each month.
At the very least a budget helps you figure out if you are spending more or less; it allows you to make real changes for example cutting back on your spending. Most importantly, it allows you to live within your means.
So if you’re serious about getting rich, you must make a budget so you know how much money comes in and how much money goes out and where it goes.
If you feel like you need help with your money, then you need the a good budget app to track your personal finances
5. Start Your Own Business.
Starting your own business and be your own boss is one of the most likely ways to get rich. In fact, most self-made millionaires are small business owners.
Working for somebody else your whole life will not make you rich. Even if you have a high paying job, you will not become rich; it’s just another paycheck. You can get fired the next day.
When you own your business, you keep most of, if not all, the profits to yourself. A profitable internet business you can start right away is a blog.
6. Have Multiple Streams Of Income.
The single biggest distinction between the rich and the poor is that the rich focuses on having multiple streams of income instead of one.
Nowadays, job security is uncertain, so it’s important to diversify your income. In addition to your annual salary from your primary job, you must have multiple streams of income from ventures like rental property.
Why this is important? Well, something bad can happen to you. You could lose your job. You could become too sick to work. These things happen every day. Having multiple streams of income can protect you from such hazards.
So having multiple streams of income is one of the ways to get rich.
7. Pay Off Debt.
One of the most important things that you need to do when trying to figure out how to get rich is to pay off your debt, especially credit card debt.
Credit card debt is among the most expensive debt to have (the average interest rate on credit cards is over 16 percent), and could prevent you from getting rich.
If you don’t pay the full balance on your credit cards, the interests charged will increase your debt and make it longer to pay it off.
If you have student loan, try to refinance it with service like Credible.
8. Investing in a Retirement Plan Now.
Another common mistake people often make when trying to figure out how to get rich is that they think it’s too early to save for retirement or they don’t make make enough money to save. With that mentality, you will less likely become rich.
When it comes to getting rich, saving money and time are your best allies. The earlier you start and more money you can save tax-deferred, the better.
So not only should you contribute and max out your employer’s 401k plan, you also need to match it.
Not taking advantage of your employer 401k plan is just passing up free money and missing the opportunity to become wealthy.
Your contribution comes right off the top of your paycheck before taxes so you never see it and you never have to spend it; all of your earnings compound tax-deferred. You simply cannot beat that.
If your employer doesn’t offer a 401k plan, then open a Roth IRA account and begin contributing the maximum.
Choose an aggressive balanced fund within your IRA that invests mostly in stocks, with limited exposure to bonds.
A free retirement calculator or a 401k calculator will help you determine how much money needed to retire rich.
9. Real Estate Investment.
Investing in real estate is one of the ways to get rich. Some of the rich people made their billions by investing in real estate.
Focus on buying several multifamily units rather than one single-family home.
10. Save Money & Live Below Your Means.
You will never be rich if you spend all of your money. To have money to save means living below your means or increasing your income.
Some people believe that if they start earning more, or get a big raise, they are justified to give themselves a lifestyle raise. This is a big mistake.
Rich people, before they became rich, live modestly. They don’t spend their money on frivolous things.
11. How to Get Rich: Invest Your Money in High Dividend Stocks.
As I mentioned above, saving money and spend less than you make is very important to building wealth.
But saving only without investing money won’t make you rich. Rich people focus more on investing. They too save money, but they realize that the key to getting rich is to focus on investing.
One of the best ways to get rich through investing is by opening an online trading account with a stock broker like Ally Invest. Their trade commissions is at $4.95 a trade.
12. Create Passive Income
Of the biggest secrets on how to get rich is to pursue passive sources of income.
What is Passive Income?
Passive income is income you earn without actively trading your time for it. Whereas ‘active income’ is income you earn from an employer where you have to sell your time for money.
Examples of passive income include, profit from business partnerships where you have little to no role, dividends from equities, rent from rental properties, and earning from a blog that you own.
Passive income is what separates the rich from the poor. The poor has to work for their money; while the rich, although they often work, they don’t need to do so.
The wealthy have money work for them so that they get cash on a regular basis without them having to sell their time.
They can sit back and collect from various passive income streams.
13. Set Aside an Emergency Fund
What if a recession cause you to lose your job? What if you get laid off? In today’s society, it’s not unusual to find highly trained professionals to be left jobless, because a new robot hits the market.
Do you have some cash reserve to live off on during months of employment? or will unemployment be enough to cover your expenses? This cash reserve is there to prevent an unforeseen event from putting you in a negative cash situation.
You will need to have 3 to 6 months worth of expenses saved up in a high interest savings account. Money in a high interest savings account means your money is safe, it’s easily accessible, and you get a higher interest on your money.
Final Thoughts on How to Get Rich
There is no secret formula for how to get rich, and there is no such thing as getting rich quick, unless of course you hit the lottery or inherit money. But to become wealthy, you have to be disciplined and be a hard worker. And implementing these 13 steps mentioned above can certainly help you build serious wealth.
While working on becoming rich, here’s what you can do in the meantime:
First, you can start a blog.
If you’re interested in earning passive income, then you need to create your own blog. It’s one of the best ways to make money while you sleep.
Starting a website with Bluehost takes less than 15 minutes and hardly costs anything. And there are several ways to monetize your website.
Read our step-by-step guide on how to start a successful blog in 15 minutes. It’s one of the best passive income streams you can have.
Second, maintain a good credit score.
A good credit score of 730 means that not only will you able to get qualified for mortgage loan, it also means you’ll get qualified for a better interest rate. And being able to get a better interest rate means that you will have lower monthly mortgage payments. This, in turn, means that you’ll save thousands of dollars on interests.
Work with the Right Financial Advisor
You can talk to a financial advisor who can review your finances and help you save 100k (whether you need it to pay off debt, to invest, to buy a house, or plan for retirement, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.