Overnight wealth is one in a million.
If “rich” seems far away from your situation, you have to start financial planning
Building wealth is a life-long process. It never ends. That’s a good thing.
It means you can achieve financial success.
1. Develop a written financial plan.
Saying you want to be wealthy isn’t good enough. You need to come up with a workable plan and put it on paper.
“Calculate what you need to earn and how to invest. The plan isn’t just a goal, it’s the whole thing — the dream, the goals, the options.”
2. Save, save, save.
The end result of your financial plan should be systematic investment. Get in the habit of saving money. Build an emergency fund in a money market account so you don’t have to raid the rest of your savings and investments when an unexpected major expense arises.
Make a point of saving at least half of every pay raise.
3. Live below your means.
Living according to a “treat yourself” philosophy can quickly lead to debt and unnecessary liabilities. Don’t be a walking billboard for overpriced designer clothes, shoes, sunglasses or jewelry. And, don’t allow your house or car payments to be budget-busters.
4. Lay off the credit.
Some people say that if you can eat it or wear it, don’t put it on your credit card. That’s good advice, but take it further. Try not to put anything on your cards that you can’t pay off in two or three months. You need only one or two credit cards. If you have a fistful, pay them off. Remember, debt holds you back.
“It reduces cash flow for other things, including investing,” Welch says. “If no one gave you money to borrow, you’d be better off.”
5. Invest in ways that work for you.
It takes money to make money, but that doesn’t mean you need a lot to invest.
Open an account with a mutual fund company that has no-load funds and low expense ratios. Build a diverse portfolio, and you can reasonably expect to earn 8 to 10 percent annually on your investments over the long haul. If you have the initial cash to put into buying property, consider investing in real estate. You can create an additional revenue stream for yourself by renting, and earn long-term through appreciation.
6. Start your own business.
Entrepreneurs create most of the country’s wealth. Most millionaires in the making, 8 out of 10 earned or increased their assets on their own, a survey by Fidelity Investments found. That holds true for actual millionaires as well.
7. Get professional advice.
A good financial planner can help you fill your portfolio with the right investments and dump the wrong ones. You don’t need to relinquish control, but you do need to form a good relationship with an expert in this complicated area.
Maybe finding the right adviser could tip the scales toward the seven-figure milestone. If you can’t afford to have a financial planner you can simply take a course on Financial Planning & learn how to manage your money.
These are the 7 tips which implemented well can make you a Millionaire in 2020.
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