We're all striving for wealth, or at least financial stability without the worry of paying bills or coming up short at retirement. The path to financial freedom begins with a goal of maximizing your net worth. So, let's begin with a plan.
1. Start by determining your current net worth. List the value of all of your assets (home, vehicles, bank accounts, investments, retirement funds, etc.) and subtract your liabilities (debt). Your home is likely your biggest asset. The faster you pay off your mortgage, the more cash you'll free up to consider investment properties such as rental homes or vacation homes. Vehicles and toys (boats, motorcycles, etc.) lose value quickly so they bring no value to your plan.
2. Stocks, bonds and mutual funds can be very profitable if you know what you're doing. It's wise to consult a financial planner who's knowledgeable of the market trends to guide you. These investments should be considered long-term.
3. Retirement funds and investments play a huge role in growing your wealth. Many of these offer tax benefits, and when invested wisely, has the most potential for increasing your bottom line. The younger you are when you begin investing, the more wealth you'll have at retirement.
4. Consider starting your own business. The wealthiest people in the world are not employed -- they are employers. Choose something sustainable and that you know well. Keep your day job while running your idea as a side hustle until you know if it will be profitable.
5. Invest the extra money you save by living below your means. Most people spend around 40% more than necessary for daily living. Imagine how fast 40% of your income will add up! Learn more about living simply.
A wealth building plan is really quite simple: earn more than you spend, invest wisely and avoid debt. Reach out to experts who know more than you do about money. Studies show that we tend to adopt habits - good and bad - from the people we spend the most time with. So surround yourself with wise spenders and investors and one day, you could join the millionaire's club!
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