As the song says, money makes the world go around, and for some it seems to spin faster than others. As often as we may downplay our desire for money, at least in public, the fact remains that we all want some degree of wealth – even if it is just enough to feel a comfortable feeling of security.
Becoming wealthy seems like an elusive goal for most, and the focus is often on the process of earning money. Building wealth however, is more about what you keep than what you earn. For every person who has been on a six-figure income and has nothing to show for it there is another person who has quietly built a sizeable nest egg on nothing more than a lifetime of average income.
So, what’s their secret? Let’s outline some of the key habits of those who have been successful at establishing a strong level of financial security.
- They spend less than they earn. It may seem simple but much like the weight loss mantra of burning more calories than you eat the most important aspect of building wealth is to make sure you spend less money than you make. Sadly, for many, this is where the plot unravels. Easy access to pay day loans, drawdown mortgages and credit cards with low minimum payments has proven too much of a temptation for many.
- They Pay Themselves First.
- They know the difference between ‘savings’ and ‘accumulation. We all have savings accounts, but for many this is simply a ‘saving for a rainy day’ account for when the car breaks down or the holiday needs to be booked. Wealth builders understand that the money they save must never be spent and is only for investment.
- They get advice. They call on experts to help them multiply their wealth through a plan that sees their money working for them.
- They think twice about debt. They understand the difference between bad debt, which funds their lifestyle, and good debt, which can allow them to leverage their wealth through investing in assets. They only choose the debt that will let them build their wealth further.
- They hang out with financially savvy people. You are the average of who you spend your time with. If your friends and family are prone to financial strife it’s not an environment to encourage your habits. Being around other people who know how to build their wealth will create an environment which will make it easier to build yours.
Wealth building is a slow and steady process. If you’re prepared to be disciplined and patient you will not only discover you have more money, but you’ll discover the power of how that money can work for you.
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The information in this article is general in nature and does not take into consideration your personal situation or circumstances. You should consider whether the information contained in this article is suitable to your needs and where appropriate, seek professional advice from a Financial Advisor or other finance professional.