Five Simple Steps for Gaining Wealth

Posted on 03/03/2009

Rich people. They seem to have it so easy, don’t they? They can buy what they want, when they want and they don’t have to use coupons. There may not be as much separating you from the wealthy as you might think. Here are five simple steps for gaining wealth.

Stop Overspending
Shopping is ok. Spending is ok. Heck, buying those super cute shoes at the mall is ok. As long as it fits in your budget. And that’s a biggie. You will never gain wealth if you are spending every penny you earn– especially if you’re spending it on things that will decrease in value, i.e. iPods, manicures, cars.

Pay Cash for Your Car
Yes, you read that right. Pay cash for your car. If you think about it, for most people your car is your biggest investment besides your home. Hopefully your home will increase in value over the years and end up making you money. But there is a zero percent chance your car will increase in value. Let’s say you can scrape together $2000 for a car. Then for the next two years you set aside the money you would be spending on a car payment each month and use that to pay cash for another car. Slowly you will be able to upgrade into nicer cars– and they’ll be completely paid for!

Ditch Debt
You will never build wealth when you’ve got piles of debt to pay off. Instead of putting your earnings toward increasing wealth, you’re just struggling to decrease your debt. Use a calculator like this one from CNN Money to find out how long it will take for you to pay off your debt and how much you’ll spend on interest. Having a debt-free date to look forward to will be a great motivator for paying it off.

Buy Low
Any investor will tell you: buy low, sell high. The good news is now pretty much everything is low. Think of it as a big sale on stocks and real estate. Meet with a well-qualified financial advisor who can guide you in making smart investments and when the market bounces back your wealth will increase.

Never Stop Saving
No matter how tight your budget gets, always continue to save money. Nothing builds wealth more than time so the more money you put away now the more money you will have down the road.

By Alison Storm

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