How To Get Rich Realistically And Stay Wealthy For Life

How To Get Rich Realistically And Stay Wealthy For Life.

The reason most people never get wealthy or keep the money they do get is that they don’t develop or practice good wealth management habits, according to psychologists.

There are habits you can develop that can increase income. As well as skills you can learn to ensure that you invest your money wisely so that it can grow and profit over time.

Learning these wealth management tips and unlearning wealth-destroying habits are the first steps to staying wealthy once you are rich.

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How To Get Rich Realistically And Stay Wealthy For Life.

Develop Smart Wealth Management Habits

The secret to becoming rich is simply a combination of making more money, and then not spending it, while investing some of it wisely. It’s called wealth management and there is really nothing fancy or surprising about it.

Yet the concept is difficult for many to comprehend. Let’s explore this.

Know Your Money

When it comes to figuring out how to get rich, you first need to figure out your current income and expenses situation. Make a budget, track your monthly profit and loss down to the cent, and truly be knowledgeable about your financial position.

Rich people are tedious when it comes to their personal wealth management.

Pay yourself first

Most people sit down each month or week and pay all the bills. Then they put whatever is left in their savings or investment account.

These people usually end up with little or nothing left over.

The trick to saving money (a lot of money) is to pay yourself when you get your paycheck. Automatically put a percentage in your savings or investment account, then pay your bills.

This helps you in two ways.

First, it forces you to live within your means and budget, and second, it ensures that you will put money away.

Maintain A Cash Reserve

Successful corporations and individuals maintain a cash reserve. That is, they have a specific amount of cash they keep on hand for a rainy day.

You should employ the same strategy.

That way you won’t be forced to use credit cards, home equity loans, or other high-interest debt instruments to cover emergency expenses.

Keep your cash reserves in an insured, interest-earning bank account, such as a savings, a CD or a money market.

A good rule of thumb is that an individual should have around $5,000 in cash reserves.

A family or couple should keep around $10,000 in cash reserves.

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Avoid Debt Like The Plague

One of the biggest tips for how to become wealthy is to not go into debt. Don’t spend more than you earn or can realistically pay back in a short amount of time.

Debt, no matter what form it takes, is a wealth destroyer because it eats up future income.

Likewise, there are some forms of ‘good debt’ such as mortgage loans (if you get a good rate and intent to flip the home for profit), business loans (if you can quickly get a good ROI from your business income) and other expenses as long as there is some way of you profiting later.

But only use debt-based instruments, such as credit cards and car loans when you have absolutely no choice. Generally speaking, people with a lot of debt will never accumulate wealth, but only more debt.

Invest

Investing means that you buy something that will either generate income, for yourself or have a resale value higher than you paid for it.

Such as a stock or a piece of realty, and hold it for a long time. It also means that you ignore short-term conditions and focus on long-term goals.

An example of this would be to buy some good stocks you really believe in and let them sit. Then ignore the financial news and the gloom-and-doom talking heads.

Make sure that a large portion of your money, preferably a majority of it, is placed in investments that beat inflation. The average U.S. inflation rate from 1914 to 2013 was 3.3%, yet most savings accounts pay an interest rate of around 1%.

That means money held in a bank account actually loses value over time. If you want to protect your money from inflation, you’ll need to keep it in something that historically beats inflation, such as stocks or real estate.

StockWoo.com has some helpful investment tips on their blog.

You don’t have to start big, you can start with small investments and increase them overtime. For example, I flip blogs for profit as an investment. I buy websites, develop them into businesses, and then offer them as ready-made blogs for sale.

Diversify Investments

That means you keep your money in a number of different baskets so that all of it won’t be lost in economic turbulence. An example of diversification would be to keep 10% of your funds in savings and CDs, 30% in stocks, and 60% in real estate.

Also, investigate the use of insured investments. Insured investments, such as annuities, are tax deferred (that means no income tax is due on money in them until it is taken out), so they can reduce your tax burden.

More importantly, such investments are guaranteed by insurance companies and state governments, so the money in them is protected. An annuity issued by a AAA rated insurance company can give you a guaranteed retirement income for the rest of your life.

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Related: The 12 Money Books You Should Read If You Want To Get Rich

Learn and study

If you want to learn how investments and finances work you’ll need to learn about them.

Be willing to read books, do online research and take courses on the subject that you want to be good at. Don’t rely solely on ‘free’ training as ‘free’ only gets you so far.

Blogging is my main income source. I was able to quit my job to blog fulltime and it was the best decision I could have made. If you want your blog to become your fulltime income, you need to be willing to learn the ins and outs of the business.

Just as if you wanted to become a designer, you’d go to school for it, and becoming a blogger is no different. Invest in your education. This blogging course teaches you the business of it, step by step.

Be Your Own Boss

Almost all people that get rich do it their way. They started their own business or devised their own investment strategy. Rich people have multiple income streams, and almost always they are the ones in the boss’s chair.

You will never become wealthy if all you
do is work as an employee for someone else’s business.

To know how to get rich you must understand that you need to take control of your income. You have to work to become rich yourself, and battle to hold on to your wealth.

Start a business, start a blog to make money, develop your side hustle ideas into a career, just do whatever you can to take control of your income. You need to create opportunities for yourself.

Develop Multiple Streams Of Income

Most wealthy people have several streams of income, including salary, investments, online business income, and more.

Even streams of income that can give you a few extra dollars a month can help build wealth over time.

Look for investments, such as dividend stocks and rental properties, which provide a regular stream of income. Such extra income builds wealth, particularly when it is reinvested through compound interest.

My personal favorite way to add additional income streams to my life is through affiliate marketing. You can promote any product that interests you and earn a commission for referring sales.

There is no expense or cost, just your time. Read this beginners guide to learn affiliate marketing.

Wealth Protection

Protecting a wealthy lifestyle is just as important as earning it. Working hard to make a lot of money is a waste of time if it is lost, which means you’ll need to spend just as much time and effort protecting wealth as earning it.

Nobody else is going to protect your money like you will.

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Keep Track Of Your Cash

It may be a good idea to put your extra cash in FDIC insured bank accounts, such as checking accounts, savings accounts, Money Market Accounts, or CDs. Yes, having a big wad of cash around is emotionally satisfying, but if that money gets lost or stolen, it cannot be replaced.

The Federal Deposit Insurance Corporation insures most bank accounts of up to $250,000. Best of all, that insurance comes free with the bank account.

In this age of debit cards and easy electronic money transfers, accessing that money is easy. There’s no reason to have large amounts of paper cash around anymore.

Having adequate insurance to cover emergency expenses

Many people lose everything in a catastrophe such as a fire, simply because they don’t have enough insurance.

Make sure that you have enough homeowners or renters insurance to replace everything in your home. Also, make sure that all the contents of your home are covered by the policy.

You should have health insurance to cover medical emergencies.

There’s no excuse not to have health insurance these days. Starting in January, federal tax credits will actually pay a large portion of the cost of such policies through many Americans. Details are available at healthcare.gov.

Another kind of insurance to investigate is disability insurance, which pays cash if you are unable to work and is an integral part of protecting your wealthy lifestyle.

Having an adequate amount of insurance can keep you from using your savings or investments in an emergency.

Don’t give up

The most successful people succeed at getting rich and wealth management not because they’re smart or capable, but simply because they don’t give up.

If you really want to get rich and keep the money you earn keep trying. Most entrepreneurs fail several times before they start a successful business. Most successful businesses take years to finally take off.

How To Get Rich Realistically And Stay Wealthy For Life – Conclusion

Now that you know the practical formula for how to get rich, it’s time to implement it.

The time to start implementing wealth management and wealth protection measures is now. Start now with the right money mindset and develop these wealth management skills today.

After all, if you don’t take steps to protect your wealth from the start, you will probably lose it.

You’ve grasped the basics of becoming wealthy. Now let’s take this one step further: How To Become A Millionaire.