Financial security and stability is something that most people want. It’s also something that most people aren’t entirely sure they have.
According to GoBanking Rates, 62% of Americans have less than $1,000 saved in their bank account. The Federal Reserve Board reports that as many as 47% of Americans wouldn’t be able to cover a $400 emergency without borrowing money or selling something. These are some startling statistics that reveal Americans today are not successfully building wealth for their future.
So what can we do? What can be learned from past financial mistakes or missteps so that you are able to build wealth for your future? Regardless of your financial circumstances today or how old you are, there are five important ways you can start or resume building wealth. And the best part: you may even live a happier life in the process.
Here are five big tips to start building wealth and never stop.
1. Defer Gratification
Yes, defer gratification so that you can build wealth. When you stop yourself from purchasing everything you want right when you want it, you become more selective about your spending. This behavior allows you to give yourself a “cooling off period” so you can determine if it’s a purchase you really want, as well as save up the money until you can afford that item in full at the time of purchase. Even if you want something, it is always a good idea to step back and consider if it really makes sense financially. “Live like no one else, so you can live like no one else in the future.” – Dave Ramsay
2. Look For Big Opportunities in Dark Moments
“Be fearful when others are greedy. Be greedy when others are fearful.” – Warren Buffet What this means is to buy low and sell high. Really, it’s most valuable to simply be aware of your own human behavior in these economic moments. How are you invested? We recommend that you save 15-20% of your gross wages going toward the future and live debt free. Beyond this, it’s putting yourself in the position to ride out economic turmoil without panicking and taking advantage of dislocations in the market. Working with a financial advisor on what this looks like for you can help you see and seize opportunity in such moments.
3. Invest in Yourself
It takes five years or 10,000 hours to master something. We encourage that you learn as much as you can so you can better yourself in the future. Avoid the get rich quick schemes. Instead, learn and hone a marketable skill set so you can potentially earn a higher wage and set yourself up for long-term income growth. When it comes to your finances, long-term is your friend. Just as a financial strategy grows and builds wealth over time, so too does your income when you learn and grow your own discipline.
4. Make Best Use of Your Time
Make sure the things you are spending your time on are really making the best use of your time. It can be too easy to get busy doing nothing. When you consider how you spend your time in any given day, are you spending it in ways that align with your passions and interests? Living a life that makes the best use of your time can have a powerful impact on your ability to build wealth. This is because you focus on the things that make you happy and remain steadfast in your desire to increase these opportunities. Whether it’s taking a family vacation or enjoying a hobby, traveling someplace new or even learning a new skill. Whatever it is for you, we encourage you to protect your time and spend it in ways that are truly fulfilling. Wealth comes in different forms and extends beyond money to other areas of your life that matter most to you.
5. Don’t Be in a Hurry
Lastly, try to not be in such a hurry that you don’t enjoy each moment of your life. It can be easy to fix on the future and the next thing you’re trying to accomplish and miss the fulfilling and rewarding moments happening right now in the present. Slow down and smell the roses so to speak. It may sound fluffy, but slowing down can help you evaluate situations with a clearer perspective so you make more intentional decisions with your time and money.