There are many misconceptions about wealth. Some people believe if they only had an endless supply of money all of their problems would be solved. Others believe only those who start out rich can amass wealth. Then there are those who wish for wealth assuming the only way to obtain riches is by winning the lottery or some other financial windfall. What these people don’t understand is the financial stability and independence we all crave can be achieved by everyone if we are careful and consistent with our finances.
For the vast majority of individuals financial solvency will be something which has to be worked toward, not something automatically given or inherited. This requires a bit of financial savvy and planning on the part of the individual. To build wealth you do not need to start out with a ton of money; however, you do need to start somewhere. Without a savings plan and the discipline to carry it out that plan you will likely never experience financial wealth.
The first step in building wealth is making the mental decision that you are willing to commit to the process and follow a plan.
Individuals who “think” about getting rich or “wish” they would wake up one morning wealthy will likely continue to think and wish for the rest of their lives. It is the person who decides to make it happen and then implements a wealth building plan to which they commit who will see their money grow.
If you do not have a budget – create a budget now. Your budget must be realistic and based on how much income you have coming in as well as all financial obligations. Your savings should be included in your financial obligations as an obligation to your future. Those savings must be viewed and treated as any other payable expense. If you treat your savings as negotiable or as something you hope to eventually have happen in your life you might as well give up before you start.
Once you have a plan in place take your ideas one step further and set up automated deposits, payments, and savings contributions. Automation can turn your plans of amassing wealth into a reality because it removes the need to make many important financial decisions on a monthly basis. If everything is automated then the decision is made for you.
Taking the time and effort to set up automated finances at the beginning will greatly assist you in steadily growing your wealth over time.
For example, if direct deposit is an option offered by your employer you should utilize it to reduce the likelihood of spending part of your paycheck before you have taken care of other obligations. You can opt to deposit all or part of your paycheck into any number of checking or savings accounts. This single step will greatly improve your money management because it limits your access to cash before the funds hit the appropriate account.
When you created your budget a certain percentage of money should have been set aside for investments such as retirement accounts or other long term investment strategies. Whenever possible automate these payments as well to ensure you are putting as much money aside for your financial future as possible.
By automating your finances you eliminate the emotional and sometimes impulsive decisions we make regarding money. When your income streams (including passive income) are automatically directed to various checking and savings accounts the money gets there without the chance of getting absorbed elsewhere in your budget. Your financial obligations, savings, and investment contributions are set up to automatically be “paid” — you do not have the opportunity to waste the money elsewhere.
Are you ready to become a millionaire?
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