By: Admin / TextrOnline
The first rule to build your wealth is to spend less. The real question is, how do you spend less? Where do you go to maximize your savings? At what rate do you compound money for it to become sizeable?
You don’t always have to start with a massive 6 figure income to be able to become comfortably affluent. It requires a change of habits, strategic thinking and a good know how of the world of investment banking.
Here, we offer 5 tips to accumulate wealth quickly, which can get you thinking more seriously about the next step you take with your savings.
It can be overwhelming and anxiety inducing to have your finances in front of you laid bare. It means the bitter truth is right there, staring at you. But most likely, it is not-so bitter. If your savings are going in the negative, it doesn’t matter. The decisions you’re going to make after this will ensure that your bank balance remains positive.
Calculate your net worth. You can do this by adding your home’s value (if you own it), your investment accounts, property or assets and your bank account balances. Then you subtract student loans, mortgage and credit card debts.
Most of the time the company you work for likely offers a 401(k)program, where your employer matches a percentage of your income that you can contribute to your own retirement plan.
Your employer can match 100% of your contribution to this fund, but the highest % you can contribute is 15% of your income. An investment of$5,000 becomes $10,000. You are saving money without doing anything, so you should take advantage of this perk.
Sometimes, you don’t need to have a goal when you’re saving. Eventually you figure out investment plans that are going to help build your wealth fast. Thus, save without thinking twice.
If you have a checking account, open a savings one, and transfer a percentage of your income to that.
There is no active thought behind what you have to do every month and you’re able to save and earn a percentage of interest without even trying.
Now that you’ve been able to figure out ways to save your money it is time to invest it. Let your money grow and earn you more money.
What better way to do that than get interest on your interest? Calculate compound interest by multiplying the initial principal (money originally deposited) amount by one plus annual interest rate raised to the number of compound periods minus one.
If you have a savings account after earning an interest on the initial savings, you’ll start earning on the interest you’ve already earned.
To be able to save more is always a plus. Thus, a side hustle that won’t take up too much of your, but has you invested, is a great start.
Freelance work is always a good option to start saving up because the gigs are contractual and do not require a long time commitment. However, if you’ve been interested in starting a small online business, especially in wake of COVID-19, it is sure to help with your savings.
At first, due to all the expenses you have to bear, saving money might seem to be an impossible task, but with patience, and with saving and investing money you are sure to become wealthy quickly. When you start small, and choose to continue investing, overtime you will see how the choices you’ve made accumulate into sizeable savings.