What are the best personal wealth building strategies for entrepreneurs? How do I increase my wealth without working too hard? What are the exact steps one can implement to attain financial freedom and get out of debt? If you seek answers to any of the questions above, then i advice you read on.
Everybody keeps talking about how it’s such a cool thing to get wealthy independently but what does it even mean to be independently wealthy?
Getting wealthy independently simply refers to a stage in a person’s life where they have made enough passive income such that they no longer have the need to work so hard or depend on other people for a source of livelihood. You can also look at it as a situation where a person doesn’t have to work for money but rather have money work for them.
Does this even make sense; is it possible for a person to be wealthy without working really hard? Yes, it’s certainly possible and that’s exactly what we are going to spend the next few minutes discussing.
You see, establishing secure personal wealth can give you more confidence in yourself and the welfare of your future and family. That is why it is important to start early now on the quest for independence and stability. Most of the world richest people didn’t attain that status overnight, they started early, built wealth over time and became rich. So if you are interested in becoming rich in the nearest future, then here are the top 10 personal wealth building strategies that will help you know where to start on this journey to financial freedom.
10+ Guaranteed Strategies for Getting Wealthy Independently
First, you have to understand the concept of passive income. Passive income is exactly what makes you work less and earn more. It is a kind of income that you earn without necessarily being directly involved in the process/work that generates the income. Most times, passive income is generated once-off kind of work.
For instance, if you build a house; the entire process is done at once and for the rest of your life; you would continue to enjoy rents paid on the house without having to do anything else; that’s a perfect example of passive income. There are also other sources of passive income like royalties paid on something you invented or a book you wrote, affiliate marketing, network marketing and several others.
If you want to make wealth independently, you would need to focus on building enough passive income streams such that you continue to earn money without necessarily involving yourself in the process of generating it. One thing about passive income is that you cannot have too much of it; because you are not working directly for it, there would be nothing like time lags or stress or all the other factors which may hinder a person from increasing his source of income. You don’t have to work two jobs at the same time or exert energy in any way. Passive income can be likened to getting paid for doing nothing. Some other ways you can make wealth independently include-:
1. Develop the right mindset-: It is an established fact that getting rich begins with the right mindset. If you can’t picture yourself being financially free, you probably won’t. With the right attitude, you will develop the right money habits to discipline yourself and sharpen your instincts on prospective wealth building strategies.
2. Avoid Credit-: No matter how hard you work to become independently wealthy, too much credit can stop you from achieving that goal. Credit is not free money, it comes with a price and that price is interest. With interest rates, you have already committed or should I say spent some of your future income now. Therefore, you must try as much as possible to avoid loans and credit facilities with high interest rates.
If it’s possible, try not to own a credit card because it encourages impulse spending but if you must own a credit card, make sure you use it only when extremely necessary. Your credit card shouldn’t be for luxury items or for impulse spending; rather, it should be held for precautionary reasons only. You should also avoid bad credit and late repayments. When you have a credit obligation, ensure that you pay off as fast as you can to avoid accumulating more interests.
3. Reduce your expenses-: Another thing to do is to try as much as you can to spend less than you earn. If you are currently spending 100% of your monthly income or even 95% of it monthly, you are a long way from getting wealthy independently. You should try to cut your expenses to at least half of what you earn. It sounds really impossible but it is provided you are ready to do away with some of the things that cost you too much.
If you eat at restaurants every day, why not try eating at home and cooking your own meals? If you drive a car that consumes too much fuel and costs you a lot to maintain, how about changing to a vehicle that’s cheaper to maintain? You could even relocate to a neighborhood that is cheaper to live in if your current neighborhood is costing you too much money. The truth is that if you look around you, you would find some things that are gulping your income which when reduced, could boost your residual income by a significant percentage.
4. Devise a concrete plan-: You need to set expectations and immediate, short term, and long term goals. Having goals will give you the right direction as to how you will be spending and earning money. This is not just limited to finance but to life in general.
5. Develop a strict savings culture-: You would also have to be an unrepentant saver. By unrepentant saver, I mean that you must be disciplined in your savings habit such that you wouldn’t be running to the bank to withdraw your savings every time it looks like you are cash trapped. You must be able to ‘forget’ your savings regardless of your current financial situation and you must also be ready to save at least 20% of your monthly income.
You can begin with a freedom account.This is a savings account which needs to be easily accessible in case of an emergency. A freedom fund is where you will be getting money from in case of an emergency or if you want to make a career shift and need a boost.
6. Figure out your risk tolerance-: Finding out how much of a risk taker you are will pave way to the kind of businesses, insurances, and investments that are suitable to your personality. Remember, investment is a risk, so it is advisable you don’t invest above your financial capacity.
7. Find out if you would rather be a business owner or climb the corporate ladder-: Whichever path you take, you must research on the best way to gain personal wealth from it. If you choose to climb the corporate ladder and save or invest towards your retirement, do it. If you would rather build a business and sell it off, it is also okay.
8. Invest wisely-: Investment is also highly critical to your financial success and independent wealth. By investment, I don’t mean buying some dead stocks that may never bring you anything significant. I mean that you should have a reputable, smart financial advisor who would advise and assist you in investing your money in the right places to further boost your earnings potential.
9. Pay your taxes-: Tax evasion and avoidance is a huge deal breaker for anyone who is really serious about making independent wealth. You should try as much as possible to meet up with all your tax obligations as and when due to avoid penalties in the future.
10. Marry a Hardworking Spouse-: You are probably laughing now and thinking “What does marrying a hard working spouse have to do with anything?” Now, think of it this way; would you be able to save and invest 50% of your income if you are the sole provider of your family? It’s absolutely difficult! But if your spouse brings something to the table, no matter how small, you would have more money to spend and invest. It doesn’t matter that your spouse is a stay-at-home mom or dad; stay-at-home parents can still earn passive income. Therefore, you must encourage your spouse to support you financially if you want to make independent wealth fast.
11. Secure what you have built. This step is probably the most important, yet it is often ignored. Insure the assets which are most susceptible to losses, from property insurance to life insurance. Why invest time and resources to build wealth without shielding your wealth from financial predators.
12. Monitor your financial flow. Cut back on unnecessary expenses and channel the money to more appreciating assets, such as investing in gold or a mutual fund, hedge funds, etc.