I usually see them a lot. Different ads among different websites, all asking the same question. Do you know how to become a millionaire or build your net worth? I realized, most if not all of these were scams. What we are shown to build our net worth is different than actually building it.
Believe it or not building your net worth starts with a plan. Do you think Bill Gates or Warren Buffett just one day became rich? No! They started by making a plan. They found a partner, someone they trusted and they used that person to help them build their ideas. Whether it was starting a company or investing, they became wealthy over time.
We get too caught up in thinking that everyone else gets lucky. “If I would have just thought of the paperclip I would be rich!” “If I would have thought of a really awesome idea I wouldn’t be working my dead-end job.” But the truth is, investors and business owners spend countless hours crafting a plan. They know nothing just comes easy.
Don’t let money rule
Going back to Warren Buffett. He bought and still lives in his Omaha Nebraska house he bought for $31,500 in 1958. (pictured above) Amassing billions can change people, but it’s still nice to see that in order to stay at the top, there are certain decisions that may contradict what we constantly hear in the news.
Build wealth by saving
Three great rules to live by. Give your money away, pay yourself, and take care of everything else with the rest. If you aren’t saving money your spending it. Don’t end up old and broke. If you do then no one wants to take care of you.
Invest your money
Ever hear about compound interest? Gone are the good ole days of 5% savings accounts. To have a decent chance at retirement you should consult with an advisor on how to invest your money, especially if you are uncomfortable in this area. And if you still don’t believe me, look up all the presidential candidates of the USA, do they invest money?
By far the easiest way to build your net worth is to not take on any more debt. The best way to do this is to add up all your expenses then add up all your income. Do you have money left over, or are you living in deficit? Until you know this you could be sabotaging your net worth month after month.
One of the biggest advantages I have when I work with high net worth clients is to get a glimpse of their mindset towards net worth. One of the biggest things I realize is that they put others first. They aren’t trying to make a quick buck, instead they genuinely care about others. Of course their are exceptions, but most high net worth people realize money isn’t everything. After all when you can afford most luxuries in life, there has to be something more.
Take risk and learn from mistakes
The two ideas can happen in one event. One of the biggest risk I have taken so far is buying a house and renting it out. I knew a small amount at the time I did it. In fact I am still very new at the whole thing. But, since I have had hiccups already along the way, I have learned from my mistakes. Who knew that living next to water required flood insurance? Or that renting your property increases your homeowners insurance? Granted, these aren’t big mistakes, but lessons learned nonetheless.
You may think this list is generic. You may think this is just another boring post. But, if you take these steps seriously you could drastically increase your net worth. If you take and implement just one step consistently, talk to me a year from when you start that change and see if your net worth hasn’t increased.
What’s the best way you have seen your net worth increase?