5 Legitimate Ways to Get Richer

dollar-1362244_1920Contrary to popular belief, it’s not extremely difficult to get rich without winning the lottery or falling into a large lump sum of cash. There are much more realistic ways to get rich over time.

It ultimately comes down to keeping more money in your pocket and managing it correctly. These may not be ‘get rich quick’ strategies, but here are 5 legitimate ways to get richer over time.

1. Pay Off Your Debt

More than half of all Americans are living with some form of debt. Being in debt makes goals like financial freedom and early retirement unattainable. It’s a barrier that stands in your way to prevent you from achieving what you really want out of life. If you are constantly paying on your credit cards or other forms of debt each month, you won’t have the means or the motivation to focus on building wealth. This is why it’s so important to work on getting yourself out of debt first.

Lower your expenses so you can free up more of your income to make extra payments toward your debt, start living off one income if you are married, refinance your debt to lower your interest rate, and do everything you can to become debt free once and for all.

2. Start Investing Today

Have you started investing yet? If not, there’s no way you can start building wealth and become rich in the future. Investing is the key to wealth and it’s best to start as early as possible to see the best results. When you invest wisely in the market and diversify your portfolio between stocks, bonds, ETFs, and retirement contributions, over time your contributions will compound as they earn interest and produce dividends or returns for you later down the road.

In other words, investing is basically a foolproof way to get richer as long as you follow these foolproof steps:
1. You contribute money into retirement and various different investment vehicles.
2. Then, your money starts to work for you and earn interest.
3. After that, you start to see a return on your investment once your net worth increases and your portfolio starts becoming worth much more than you even contributed initially.

Please be aware that going from step 1 to step 3 can take several years. However, many average people like you and me and are retiring early in their 30s or 40s and living off the returns of their investments while others are growing their investments to well over $1 million by the time they reach retirement age.

The trick it to get started early. Matter of fact, start today. You can invest easily and safely with companies like Vanguard, Betterment, or Motif.

3. Save At Least Half of Your Income Every Year

In order to invest lots of money, you’ll need to spend way less than you earn. I recommend living on only half of your income at most, and saving and investing the rest each year. Max out your retirement accounts and save several months of living expenses so if any unexpected expenses pop up, you don’t have to go into debt.

Keeping expenses low is something I’m good at, but last year when I tried to live off half of my income, I realized it’s much easier to do when you earn more money. If you’re only earning $30k per year, it’s hard to try to live comfortably on half of that and if you have debt, forget it. Thus, you may need to earn more to reach this point.

First, you need to determine how much money you can comfortably live on per month. Then, make sure you’re earning double that. For example, I can live comfortable and meet all my needs on only $20k-25k per year. If I want to save half of my income so I can build wealth, I should probably try to earn at least $50k per year. You may want to get a second job, ask for a raise at your current job, or establish a side hustle to boost your income too.

4. Establish Multiple Streams of Income

Millionaires tend to have an average of 7 different streams of income. If you want to become rich, you have to break free of the ‘one job’ mindset and realize that there are many different ways to earn an income and you don’t have to settle with just one of them. These days it’s hard to make ends meet with one job let alone build wealth. This doesn’t mean you should try working 3 full-time jobs and burn yourself out, but you can diversify your income streams in a number of ways.

For example, if you like your main full-time job and it provides you with a stable source of income you should keep it. You can also start a side hustle outside of your job like freelance photography, babysitting, or graphic design. Then, you can invest in a rental property or rent out your basement, start a website or blog to monetize, and write an ebook about a topic you are an expert on and sell it online on Amazon.

A lot of those ideas don’t require 40 hours of your time per week so you can certainly diversify your income without consuming too much of your time. Establishing streams of passive income that don’t require much of your time or effort is best.

5. Continue to Live Below Your Means

Even if your income increases over time and you’re able to establish several streams of income, it’s important to continue to be frugal and live below your means. Most rich people may not even appear rich to strangers because they are committed to living below their means which helps them hold onto more of their money.

Don’t buy new electronics or a new car every year. Live in a modest home and choose frugal hobbies and ways to entertain yourself instead of shopping and paying full price for lavish trips and vacations. This will all help you stay out of debt too.

Most people have the potential to become richer over time if they follow these 5 key steps.

Do you do any of these things to improve your finances?Which one of these strategies do you think is the most important to implement if you want to become rich?

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