1. Pick The Right Profession – You can become a millionaire on a small salary with proper saving and spending habits but it will be a lot more challenging. Look to boost your income either by improving your skillsets through education or supplementing your income via a side hustle/second gig. Check out this list of best and worst jobs for the future.
2.The Stock Market Is Your Friend Bruh… – The stock market has it’s ups and downs but over the long term it returns approx. 7%-8% per year. If you invest $10,000 and let it sit in the market for 3 years compounding at 7% you’ll have $12,250 at the end of that period. Now let that compound for a long period of time and routinely add to the principle to accelerate the growth and you’re on your way to building considerable wealth.
How Compounding Works
Year 1 = $10,000 + ($10,000 x 7%) = $10,700
Year 2 = $10,700 + ($10,700 x 7%) = $11,449
Year 3 = $11,449 + ($11,449 x 7%) = $12,250
Albert Einstein is famously quoted as saying “compound interest is the 8th wonder of the world.”
3. Save! Save! Save! – The sooner you start saving the better. If you save/invest $671 each month at age 35 you’ll have$1 million by the time you turn 65, assuming you earn an 8% annual return. The sooner you start and the more you save, the quicker you get to $1 million just from saving!
4. Step Out Of The Matrix (Live Within Your Means) – If you don’t have it, then don’t spend it period point blank. We don’t need a fraction of the things that we think we need. The realization of this, is what I call stepping out of the matrix. Advertisers are so adept at tricking us into thinking we can’t live without their products. A little discipline and sacrifice now will go a long way toward gaining financial independence. Soon enough you’ll be able to purchase what you want with cold hard cash instead of financing it and building a mountain of debt. Debt is a form of bondage, it can be suffocating so shun it like the plague.
According to the National Foundation for Credit Counseling, one out of every three American households carries credit card debt from month to month. And the average credit-card debt is $16,061, according to the Federal Reserve.
|Total owed by average U.S. household carrying this type of debt||Total debt owed by U.S. consumers|
|Credit cards||$16,061||$747 billion|
|Auto loans||$28,535||$1.14 trillion|
|Student loans||$49,042||$1.28 trillion|
|Any type of debt||$132,529||$12.35 trillion|
Debt balances are current as of Q3 2016; figures are updated quarterly by the Federal Reserve.
5. Create a Budget – It’s important to know where your money is going. Once you’re able to track how your money is being spent it’s easier to control and make adjustments where necessary. I use both an old fashioned excel spreadsheet and also track my expenditures using Mint.
To paraphrase the late great Biggie Smalls “now you’ve got the manual, a step by step booklet for you to get your game on track…”What are some of the tools & techniques that you use for building wealth and staying debt free? Hit me on the Gram.