6 Ways to Build Wealth at Any Age
Building wealth is never easy and can be quite overwhelming. Nevertheless, you can learn how with patience. Although patience is a virtue, you may be impatient if you want to create wealth in your youth instead of spending decades waiting for it.
Fortunately, there are some tips that can prepare you for creating wealth today. Building wealth is not for a select few. It can be for you as long as you are willing to apply these tips.
Get Out of Debt
Debt is a huge barrier to building wealth. Therefore, you must get out of it as the first step in building wealth. Typically, debt is good if you can repay it but bad if you cannot settle it.
A few ways to get out of debt faster include:
- Paying above the minimum repayment
- Implementing the debt snowball approach
- Picking up a side hustle to increase income
- Living within your bare-bones budget
- Selling whatever you no longer need
- Getting a seasonal job
- Negotiating your bills
- Asking for low-interest rates on credit cards
- Applying for a balance transfer
Have an Emergency Fund
An emergency fund is mandatory if you wish to learn how to build wealth fast at any age. For starters, the fund helps to stop increasing your debt. That’s because it ensures that you always have money to take care of the emergency needs.
Secondly, the emergency fund is a perfect tool if you just started budgeting. Initially, you might omit some important items in your budget. In such instances, the emergency fund comes quite in hand.
This type of fund is ideal with only one source of income. It also works well for the self-employed and independent contractors. Therefore, use it to take care of medical issues or to continue saving towards financial goals.
Remember, an emergency fund should cover your living expenses for at least 3-6 months.
Invest 15 Percent in Retirement
Eventually, you will retire. Old age might force you into retirement. Sickness, especially during these COVID-19 times, could render you unable to work for a living. Therefore, start investing 15 percent of your current income into a retirement fund.
Do not be like the 30 percent of millennials who believe they will never retire. It’s better to be safe than sorry, as unforeseen circumstances could force you into retirement down the line. Saving or investing for retirement shows that you’re preparing for the future.
Saving for retirement ensures that:
- You don’t have to rely purely on your Social Security benefits
- You don’t have to burden your children with your financial needs
- Your tax-deferred retirement account reduces taxes that you would pay otherwise
Stick with Stocks
Stick with stocks when you are ready to see that wealth accumulate. For starters, this enables you to grow with the economy and keeps you ahead of inflation.
Historically, annualized returns from stocks average 10 percent. That figure is more attractive than the average rate of annualized inflation by quite some distance. While at it, do not allow temporary drops to convince you not to buy or hold on to your stocks.
Be sure to spend time identifying the best stocks first.
Explore Other Forms of Income
Do not limit yourself to only one source of income, especially if you are a young professional. After all, the world is full of endless possibilities. A few investment opportunities that could increase your income as you work on how to build wealth include:
- Real estate
You could be earning good money as a young professional. However, this does not compare with the money you earn as an entrepreneur. Embrace side hustles, too. Although, self-made millionaire Grant Cardone believes that it is impossible to create wealth without multiple streams of income.
Side hustles are perfect for:
- Increasing your savings
- Paying off your debts
Don’t Get Discouraged
Finally, you should not give in to discouragement. At first, your efforts might appear negligible. You will eventually reap a handsome harvest as long as you continue applying these measures.
Remember, wealth does not come overnight. You need long-term plans and strategies. Your age isn’t much of an issue, either. Instead, make it your goal to do what is right for your life based on your current circumstances.
Start Building Wealth Today, Regardless of Age
You can start building wealth today regardless of your age. Get rid of that debt, have an emergency fund, and invest 15 percent of your earnings for retirement. Do not forget to stick to the best stocks, either. Try creating multiple streams of income and continue working until your efforts eventually bear fruit. As you apply these tips on a daily basis, you will reap a harvest soon!