7 Nuggets on Creating Wealth for Yourself (5 mins Read)

Creation of wealth is all about wisely investing in yourself, educating yourself, and keep enhancing your knowledge, learn the basics of finances, understanding the risks and the rewards and taking the right amount of risk wherever it is needed.  Once you have all of these, then it’s about leveraging the wealth by investing in right proportions and earning the huge returns. In short, these are the strategies for wealth creation.

If you keep on doing all of these over and over and follow the below strategies, you will be able to create and generate more wealth which will exist much beyond your lifetime and continue to your heirs. Listed here are some of the best wealth building strategies:

1. Invest in yourself before investing in the markets

The top wealth building strategy if you’re young is that don’t focus on investing in the market at first. Investing only pays off when you have the required capital. Rather, invest in yourself before you think about market investments and savings for retirement. 

Having the right focus on your personal development during the younger years will help you increase your earning potential immensely. Hopefully, as reach your late twenties, you can comfortably fund your lifestyle with only 20% of your income and then consistently allocate 50% of your income into growth focused Exchange Traded Funds (ETFs) which has tremendous long term returns and be committed to never drawing from this fund until the day you retire. This will be your savings for your lifetime and will be more than enough to take good care of you after you retire. Thereafter, you should keep aside 10% of your income as an opportunity fund to start businesses. Finally, save the rest 20% for long term plans like being married, getting a house and travelling around the world. 

2. Understand your relationship with risk and rethink

Another top wealth building tip is to rethink about the risk and understand your relationship with risk. Although, it may seem that most wealthy individuals and entrepreneurs, tend to be risky, yet, when you dig deep into the lives of the big entrepreneurs and their businesses, you find that the risks which they took were very calculated. 

So, if you’re looking to be wealthy, then you need to identify some of the low cost risks which you can take. For example, start a side business or if you already in business, add another revenue stream and when you find a risk that starts offering some payoff, then you can jump into that completely.

3. Pay first and then diversify

Another top wealth building strategy for businessmen and top executives is to pay yourself first. The profit or savings then need to be funneled to a separate account which is hard to access in order to remove the temptations of spending that money.

You can then use these funds to invest in shares, bonds, mutual funds or in real estate and other different assets. The key here is to have good wealth apart from your main source of income. This process works for both the business owners as well as employees and ensures wealth over a period of time.

4. Have multiple streams of income

Building different passive income streams is one of the most realistic ways to create more wealth. Passive income isn’t found very easily. Most people need to work towards creating a passive income stream during their spare time. Starting from aggressive but balanced risk investing to slowly acquiring rental units, to creating an online learning course and selling it.

You have to start in a simple way if you’re responsible in spending. Make sure that you have enough liquid assets in a high yield online savings account or consider renting out an unused property or unused vehicles and look for other ways to scale yourself beyond your skillset. 

5. Need to develop a wealth oriented mindset

But the number one tip for creating and building long term wealth is changing your mindset. Everything starts in the mind and you are the only one who is holding you back. You have to get out of your own way of thinking. It is absolutely crucial for you to understand how you think about money and why and then only test those thoughts against the facts and reality. 

This is extremely crucial if you want to build wealth. You have to believe that you should build wealth and that wealth is good for you and your future. If you think that money is evil and the wealthy people are all devils or you will never retire someday, then why would you try to build wealth. 

Most millionaires doesn’t earn millions all the time and being a millionaire means they have a net worth of a million dollar or more. Moreover, if you think that all the rich people are terrible then find someone in your community who you think is wealthy and doesn’t fit into this thought. If you are able find one nice wealthy gentleman, then that means that all the wealthy people are not evil. 

Building wealth is all about building the life you want for you and your family, which includes your children, your grandchildren and all your near and dear ones. Once you start thinking about them and your feelings for them then you will be able to do all the practical things which you need to do to actually get there and build the wealth.

6. Keep tracking your net worth

Yet another nice tip for building wealth is to keep tracking your net worth. If you actually care about building wealth then you should take the necessary steps towards that goal. In order to measure your progress towards your goal keep tracking your net worth periodically for you to recognize your progress give you an opportunity to change your strategy if required to meet your goals. Even if you check your net worth every 6 months, you’ll still be able to see a lot of progress if you are on the right path.

This tracking habit reinforces the good money behavior positively, like good investing and reducing the debts. Once you progress, you will good feelings and experience which will motivate you more to focus on your wealth goals.

7. Always keep learning

The last but not the least tip is to remember that you are a learner for life, so always be open for learning. Without taking out the time and initiatives to learn about money, marketing and investing you would not be able to move on the wealth building path.

In order to keep learning, you can read books with different viewpoints, listening to the successful people in finances or entrepreneurship and see the financial websites. You will be able to refocus your entire money mindset. Regardless of your expertise, keeping on learning can truly impact your path to creating and building the future wealth. 

As there is no end to learning, so keep on learning as it can be the biggest game changer which you need to grow your wealth and increase your net worth.

CONCLUSION:

Remember, creating wealth is not an overnight change which can happen all of a sudden. It takes a lot of hard work and time. Even the wealthiest of people had to work day and night in order to multiply and accumulate huge wealth. It is the combined result of the wisely made investments, the good strategies, measured and calculated risks and loads of patience. The wealth which grows slowly through different investments and strategies is the wealth that stays for long.

This slowly built wealth is an asset which you can pass onto the future generations. In addition to it, you shouldn’t forget the money making skills which will help them diversify this wealth. So keep learning, earning and investing wisely and then reinvesting again. This is the only way to reach to the top and be one of the few richest people in the world.