Image courtesy of CareerEmployer.com.
Image courtesy of CareerEmployer.com.
Don’t fall for the slimy salesman pitching you a get-rich-quick scheme that promises to add digits to your bank account balance. Real wealth requires equal parts solid saving habits, savvy investment strategies and a lot of good ole fashioned discipline. Popular personal finance guru and radio host Dave Ramsey believes, “Winning at money is 80 percent behavior and 20 percent head knowledge.”
You may define wealth by a number, a feeling or maybe your ability to leave an inheritance for loved ones. However you see it, your path to wealth should primarily contribute toward that image.
A book displayed on every entrepreneur’s shelf, The Richest Man in Babylon, by George S. Clason, outlines tried and true principles to build your fortune over time. Clason offers practical advice to develop smart money habits, including these four fundamental ground rules:
Pay yourself first. Start small. Save at least 10% of all income earned. Even if you are paying off debt, 10% is still recommended.
Make saving automatic. Automatically deposit that 10% savings into a retirement account, savings account or other investment vehicle.
Avoid “lifestyle inflation” If you get a raise, keep your expenses the same as you start to earn more money.
Make your money work for you. Earn more on investments. Compound interest will help – this is simply interest on interest and it adds up quickly. Reinvest the dividends. Rather than cashing out, put the money elsewhere and watch it grow. Create a passive income. Get paid with high dividend or real estate investments. If you don’t see a high return on investments right away, don’t worry! Investing is an exercise in patience. Your holdings might not pay off right away – be patient! You might need to keep them for a while to see large returns.
The market is ever evolving and it’s important to constantly sharpen your skills. Here are some books and podcasts that will bring wealth to your mind—and to your bank account.
Think and Grow Rich, Napoleon Hill
The Total Money Makeover, Dave Ramsey
Smart Passive Income, hosted by Pat Flynn
In need of a reputable financial pro to help keep you on track? Give me a call – I have a great referral!
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