To build wealth fast, we need to spend less and earn more.
Many of us are seeking ways to amass wealth fast and hence always trying to find ways to take shortcuts to success. Disobeying the law of things’ development, only ends up in disaster as told in the Chinese idiom helping the shoots grow by pulling them upward.
It comes from a story of a farmer who was sick and tired of waiting for his rice shoots to grow. At the height of his anxiety and impatience, he devised a brilliant quick method to help his rice shoots sprout. The next day the farmer worked hard from morning to dusk, pulling each rice shoot from the ground. Needless to say, all his crops died in his haste to help them along and wasted a potentially good harvest.
Building wealth is the same. Once the seeds are planted, it takes time to watch them grow to a substantial size. Our lack of patience is one of the reasons we never achieve our financial goals as it makes us easier prey for fraudsters, investment bubbles and all types of schemes. In the end, we lose everything.
Nonetheless, we can still build wealth fast but it requires work. You will need many seeds and a lot of fertile ground to watch your seeds grow fast.
So how can you build wealth real quick? Not microwave quick, but fast. Let’s take a look.
No. 1 Strategy to Build Wealth
Great wealth builders have always focused on saving more money and earning more money. Earning more money ensures that they increased their income-expense gap and thus accumulated more wealth. Saving more money entailed reducing expenses to the bare minimum i.e. not buying crap or taking out loans for things that don’t produce wealth. Ultimately, higher earnings and lower expenses meant more money saved and invested each time.
Since building wealth is synonymous to investing. You cannot escape learning about personal finance and investing. Don’t be intimidated by it or afraid; despite the wild market rides it isn’t complicated. Just start small, use the conventional options and work your way up.
Here’s what you need to do in a snapshot:
“A man is rich whose income is larger than his expenses, and he is poor if his expenses are greater than his income.” – Jean de La Bruyère, Les Caractères
Saving More Money
Great savers save 20% – 50% of their income – the more you make, the more you can save. 50% may seem extreme for many of us, but it’s doable. According to Ramit Sethi (personal finance guru) in his New York bestseller “I Will Teach You To Be Rich”, he states that:
“On average, millionaires invest 20% of their household income each year. Their wealth isn’t measured by the amount they make each year, but by how they’ve saved and invested over time.”
Essentially, what how much you make is inconsequential, what matters is how much you put aside. The more you save the more seeds you have to make your various investments. Remember, you cannot invest money unless you have the money to invest.
So, where can you invest to achieve high growth rate on your savings?
- 0-7.5% – savings account
- 5 – 12% – treasuries, preferred stock, bonds, peer-to-peer lending
- 12% – 30% – direct real estate and private equity funds
- 30%+ – Start a small business or invest globally (top-tier private equity and hedge funds)
As much as there are all these investment vehicles, investing in paper assets that earn you a mere 12% alone will not help you build wealth FAST. The power of compounding is miraculous but it requires time. Building wealth fast requires putting more and more money into your savings/investments on a consistent basis and making the right investments in the assets that meet your goals.
Earning More Money
This is the question everyone is asking – how do I earn more money?
A common misconception about making more money is that you need to have money to mint more of it. This isn’t true. When you say such things, you mentally cripple yourself and set yourself up for failure even before you start. Building wealth requires a changed mindset too – a firm conviction that you can do anything that you set out to do.
When am stuck in a rat and cannot seem to find a way out, I try to find ways to better myself. I believe that my lack of foresight is as a result of missing information or knowledge. This way, I find myself stumbling upon new ways to build more wealth faster than ever.
Fortunately, there are four avenues of making money:
- High paying job – If you are a career person, focus on your expertise and ensure you earn your worth. This means you will have to invest more in your education i.e. get an MBA or specialized designation.
- Side hustle – Make money on the side while you work on your average paying job.
- Venture into entrepreneurship (highly recommended) – work on your business full time and ensure it succeeds. These days, business owners are investing a lot more on themselves by getting strategic coaches and/or marketing themselves. Today’s business environment requires much more out of entrepreneurs than ever before.
- Invest – become a part/full-time investor by always being on the prowl for lucrative investments.
Here’s a brief look at building wealth rapidly:
Final Thoughts
If you are young, start by saving for retirement and investing in paper assets (money markets, bonds, and stocks). Ensure that you have enough money in your emergency fund. Starting these things earlier on will ensure good financial habits that will guarantee success in building wealth in your later years.
As for the rest of us, we have to work hard at the right things or we will be merely spinning wheels and getting nothing. Learn early what works for you and what does not. The only way you can go is up. I have tried numerous businesses, which have helped me discover my strengths and weaknesses. My current businesses are as a result of several businesses that did not work. In each one, I learned and because I learned, I won.
I hope this resource helps you. Please let us know what you think in the comments section below. If this article has been of great help to you please share it.
Meanwhile, You can click on the following links to read more on building wealth:
- 5 Habitudes of Successful Wealth Builders
- Reasons To Be Your Own Financial Expert
- Leverage: The Key to Amassing Wealth
- How To Make A Budget
- How to Get Out Of Debt Successfully
