How to Become Rich in 10 Easy Ways

How to Become Rich in 10 Easy Ways

1. Plan and set goals

Rich people are goal-setters. They list what they want to achieve daily, weekly, monthly, and they can tell you where they want to be in 20 years.

Poor people just sort of wing it.

“Ninety-five percent of the poor people in my study had no life plan,” Corley wrote. “Without a blueprint, without long-term goals, we are like leaves on a fall day, floating in the air aimlessly.”

The bottom line is you don’t have to be rich to make a plan. You do need a plan if you want to be rich.

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6. Boost your current income

You can boost your current income to help in your new financial journey of getting rich. One way to do this is by asking for a raise at your current job. Be sure you have been performing well and have worked for the company for a while if you go this route. If you are a good employee, they may be willing to increase your income to keep you from looking for another job.

If you have been with your current employer for a significant time period and perform your job well, and they refuse to give you the pay increase you desire, it may be time to seek out other opportunities. Spruce up your resume and seek out an opportunity that will give you the pay bump you need in order to start getting rich.

You may also consider furthering your education in order to get a higher-paying career. Rather than going into deep debt with student loans for college, you can consider a high-paying trade career instead. Examples of trade careers are:

  • Carpenter
  • HVAC Technician
  • Electrician
  • Plumber
  • Hairdresser
  • Dental Assistant
  • Photographer

These are just a few examples of great career options with good pay. Trade Career Programs typically take less time to complete and cost less than college tuition.

3. Invest as Much as Possible in a Diversified Portfolio

While there are limits to how much you can put into a 401(k) or IRA, those limits are high enough that many people are not able to reach them. And if you do, you can always invest more in a taxable brokerage account. Thus, if you want to become rich, you should invest as much as you can — there is no upper limit to that amount.

There are many different investment strategies, but most experts recommend putting most of your money in the stock market. Some recommend a smaller portion of real estate or even speculative investments. Burrow recommends a portfolio of 65% stocks, 25% real estate, 10% speculative asset of choice.

You will want to invest that money in a tax-advantaged account such as a 401(k) or IRA first. That will help you minimize your tax bill and thus increase your returns over time. If you manage to max out all tax-advantaged accounts, you can move to a brokerage account.

More Advice: 8 Insider Tips to Get Rich in Real Estate

2. Spend Intentionally and Minimize Costs

If you want to become rich, it’s important to minimize your costs and be more intentional with your spending. This is the second step because it should be one of the first things you do. Spending intentionally and minimizing your costs will require you to keep a budget.

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In doing so, you can keep track of exactly how much you spend and where you spend it. Acuña recommends a checklist of how you will spend. “Develop a prioritized checklist for how you’re going to spend your paychecks when you receive them. This includes allocating money to debt reduction, savings, fun, emergencies, etc.”

Your goal should be to minimize costs as much as possible so you can put that money toward building wealth. Jeff Burrow, president and lead advisor at Sierra Ocean, said you should “ravenously find ways to limit your lifestyle costs and save 25% of your income.”

Make Your Money Work Better for You

Understand the Power of Small Amounts

One of the mistakes most people make when trying to figure out how to get wealthy is that they think they have to start with an army of funds. They suffer from the "not enough" mentality: “I don’t have enough money to invest.” They believe if they aren't making $1,000 or $5,000 investments at a time, they will never become rich. However, armies are built one soldier at a time—so too for your financial arsenal.

You don't necessarily need to become frugal, but small funds can eventually become millions of dollars, as long as you see the potential and start saving.

9. Take Calculated Risks 

There is no money made without a risk taken. Whether it’s starting a business or investing in stocks, every avenue to making money requires some risk. Even selling your old furniture requires you taking the risk that the buyer will show up and will pay you. It is a comparatively small risk when compared to deciding whether to spend millions of dollars on a new product line, but it is still a risk.

In order to make money, you have to take a chance that a venture or idea you have will pan out. Therefore, it is important to think deeply and evaluate multiple possible outcomes before you decide that an investment is worth it. Taking risks without thinking about them beforehand is an incredibly quick way to lose money. To earn, you should take risks, but they should be calculated.

6. Don’t engage in negative self-talk

When it comes to psychology and money, the only thing worse than surrounding yourself with losers is believing you’re a loser.

Do you say things like, “My job is too demanding,” “It’s not my fault,” or “I’m not smart enough.”

Say that enough, and you’ll believe it.

“When you allow negativity to rule your thoughts, you are programming your brain for failure,” Corley wrote. “You’ll have no chance in life at breaking out of your current financial or life circumstances. These negative thoughts will become beliefs that act like computer programs.”

What do rich people invest in?

Thanks to data from the IRS, we can see the most common income streams for millionaires. This, in turn, can give us a good idea of what do rich people invest in, as it includes:

  1. Publicly traded stock – includes individual shares and mutual funds
  2. Other real estate – includes commercial property, REITs and “residential property other than the personal residence”
  3. Cash assets – not only is this actual cash, but also bank accounts, certificates of deposit and money market accounts. This shows they generally maintain a healthy liquid net worth.
  4. Bonds
  5. Closely held stock – this is stock in companies that isn’t publicly traded
  6. Retirement assets – IRAs and 401(k) accounts fall into this category
  7. Personal residence – where the person lives
  8. Real estate partnerships – these are partnerships where the main function is the ownership of real estate
  9. Other limited partnerships
  10. Other non-corporate business assets – this is where the person is either a sole proprietor or a partner in a business partnership

This information is taken from the IRS’ estate tax statistics, meaning it primarily shows the assets held by people who died in 2018 whose estate when they died was worth at least $5.49 million.

Andit gives a pretty good indication of how people at that level of wealth split their assets. While it’s true that not all of these are investments (such as your personal residence), most of them are.

In particular, it shows how investing in shares and real estate seem to be the most popular way for millionaires to allocate their money. This should be no surprise, given how these are pretty widely accepted as the most popular – and often most successful – forms of investing.

Related: 10 Best Personal Finance Podcasts for Beginners

2. Tax Yourself

The concept of saving money is not a new one. Howe

The concept of saving money is not a new one. However, it is extremely easy to “dip into your savings” when you want something badly enough. The key to accomplishing your goal of amassing wealth is to actually try and save money.

A different way of looking at your savings is to view them as taxes. Once you pay your taxes, you never get the whole amount back. Treat your savings the same way. Set money aside in a savings account or transfer it to a totally separate account where you cannot touch it. Treat your savings like money that you will never get back, until the day that you get it all back at once.

5. Avoid fake status symbols

When you think of a millionaire, you’re sure to picture them driving an expensive car and flaunting a watch that looks more valuable than your house. 

These status symbols have nothing to do with the millionaire mentality.

The path to financial freedom is about consciously consuming, not spending big.

“Do you really need to spend two or three months’ salary to go on vacation somewhere far away, when you could rest so much better somewhere close to home?” Müller said.

2. Avoid any kind of debt

Take everything you’ve been told about saving and apply absolutely the opposite to debt. Don’t buy anything you can’t afford. It’s a simple rule that will also help you avoid whims.

“You want a smartphone, but you don’t have the money to buy it? Then don’t buy it,” explained Müller.

A lot of debt occurs when people become addicted to the fleeting pleasure that you get from making a purchase.

 “Leave a note in your wallet that says — do I really need that? With time, you’ll start asking yourself that question, and then you won’t need the note anymore,” Müller said.

Study Success and Those Who Have Achieved It

In societies such as the United States—where for centuries, fewer and fewer millionaires and billionaires are first-generation or self-made—building wealth is often the by-product of behavioral patterns that are conducive to building wealth. Replicate the behavior and net worth tends to accumulate.

Look for financial lessons not only in real-life examples, but in literature, film, TV, and other stories. These financial parables will help you understand the sometimes-complicated nature of investing for long-term gains.

You'll find that by investing in yourself first, the money will begin to flow into your life. Success and wealth beget success and wealth. You have to purchase your way into that cycle, and you do so by building your financial army one soldier at a time and putting each dollar to work for you.

4. Work On Your Career

There is no substitute for higher income. As they say, there is only so much you can cut in terms of expenses, but there is no limit to how much your income can increase, at least in theory. “Ensure that as you advance in your career/business/main occupation, you always save more than you spend as you earn raises and increase your gross income,” Burrow said. “Lifestyle cost creep will absolutely wreck a plan to get rich as quickly as possible.”

Of course, increasing your income will be contingent upon the job you have. Those working hourly jobs, for example, may have minimal leverage to increase their income. But if it is possible for you to move up the corporate ladder, that can be a powerful way to become rich as you will be able to save and invest more.

Getting Rich the Wise Way

There are a lot more important things in life than accumulating wealth. Who wants to end up rich, unloved, lonely, and in poor health? However, if you can enjoy a balanced life and at the same time become rich, why not do so?

Taking combinations from the above suggestions may not guarantee you a prosperous future, but it will surely eliminate a lot of financial troubles in your life. With one step at a time, maybe you will also become the one you dreamed of.

Featured photo credit: Sharon McCutcheon via unsplash.com

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