What if you already had everything you needed to get rich?
Getting rich often seems like an impossible goal. Many people think they will never have the right tools or knowledge to achieve true wealth.
However, it’s possible to get rich just by using your existing savings. In fact, here are a few of our favourite ways to do it!
Go Down to Go Up
Our guide is all about using your existing money to make more money. However, the most important step is to hang on to as much of your existing money as you can.
This is why you should begin by eliminating all of your debt. If you’re like most of us, you pay a lot of money for things like credit cards, car loans, and so on.
Put simply, the money going to these bills should be going to investments instead. That’s why paying everything off should be the highest priority.
Focus on one debt at a time by paying extra towards your monthly bill. Once that debt is paid off, use the money you are now saving to pay even more towards another bill.
Once you are debt-free, it’s time to start some investments.
Starting Early and Investing Often
Wondering what the best age to start investing is? The honest answer is “as soon as possible.”
It’s possible to retire as a millionaire if you start investing modestly at, say, the age of 25. The key is consistency: instead of putting away money every now and then, create a goal such as “invest $500 per month.”
Ideally, these are not risky investments. Instead, you can put this money towards things like low-cost and diversified index funds.
Ultimately, you need to think of building wealth as a marathon rather than a sprint. Don’t focus on getting rich quick; instead, focus on getting rich in the smartest possible way.
Invest in Real Estate
Speaking of smart investments: real estate is one of the safest possible investments you can make.
It’s true that real estate investment comes with some risk. “Flipping” a home can be harder than you think if you don’t already have skills in things like plumbing and repair. And if you cannot sell or rent the home quickly, you might find yourself having to pay multiple mortgages.
However, real estate is a mostly safe investment because property tends to appreciate in value over time. And thanks to assorted crowdfunding investment sites, you can invest in real estate with others and effectively share the overall risk.
You can also start small with real estate and work your way up. Over time, you may discover that buying, repairing, and selling each new home is easier than it was with the previous one.
Believe it or not, an employer 401(k) is one of the best ways to build wealth. And if you already have existing savings, it’s quite easy to take advantage of this.
Many employees make the mistake of putting only a minimum amount into the 401(k). However, it’s wiser to put in as much each month as the employer will match.
Matching funds is exactly what it sounds like: up to a certain amount (say, $5,000), employers will put a dollar into your retirement for every dollar you deposit.
That means that you can put in the maximum amount each year and effectively double your investment. And if you can max this out over the duration of your career, it’s quite easy to retire as a millionaire!
Automated Spending and Saving
People often talk about taking control of their finances. But what if you could do that in a very literal way?
For example, it’s possible to now automate both your spending and your saving. You can have your deposits automatically allocated into different accounts or sent to different bills.
We recommend trying to invest at least 10% of your paycheck each month. An automated system can set aside 10% for investment, 50% for fixed costs, 10% for savings, and so on.
Once you set such a system up, you’ll never miss another payment. And you’ll never end up spending more than you mean to because you have an automated plan for every dollar that enters your bank account.
Slash Those Bills
Earlier, we talked about the importance of paying down your debt. However, it’s equally important to slash as many bills as you can to effectively free up more of your money each month.
Let’s say you pay $100 or more each month for cable TV. If you cut the cord and replace it with something like Netflix or Hulu, you have freed up quite a bit of money.
And with a single phone call, you can often negotiate lower rates for everything from your cell phone bill to your gym membership. Each dollar you don’t have to pay on bills is money that can be saved or invested to secure your financial future.
Start Your Business
While it’s easier said than done, one of the biggest ways to make more money is to start your own business.
This is a long-term plan because most businesses aren’t very profitable when they first begin. However, if your business is successful, you can bring home much more money than you did when you were working for someone else.
If you have a good idea for a business, now is the time to make it into a reality.
Rent Out a Room
For a homeowner, their house is usually their most valuable property. Why not use that house to generate income?
You can easily turn a spare room into a rental space and lease it out. And you can do the same thing with an unused garage or basement as well.
This is a “win/win” investment because the renter will be happy to catch a good deal in the crowded and overpriced rental market. And you’ll be making hundreds of extra dollars per month without having to spend any additional effort!
Getting Rich With Existing Savings: Living Large
Now you know how to get rich with existing savings. However, do you know how to have fun while doing it?
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