Having wealth means having to think about money less at a later date. The payoff is that you have to give it a bit of thought now. Whatever stage you’re at in your wealth-creation journey, reacquaint yourself with the 25 tips below to ensure you’re making the right moves toward living the life you want. And once you have, make sure you’ll live long enough to enjoy your efforts — check out our exclusive report on 100 Ways to Live to 100!
Know Where You Want to Go
What does your perfect life look like five, 10, 20, 40 years from now? Where do you live? How will you spend your time? Whom, if anyone, will you be supporting? What makes good investment sense for most people may be in total disharmony with where you want to be. You need a plan that’s all about you — bespoke, not off the rack. Thinking out of the box with the endgame in mind can pay off massively in your wealth-creation plans.
Make goals and bucket lists along the way
Set short- and long-term goals to help measure your success. Keep wealth, career and lifestyle goals in the same list because, well, they all have to be more or less harmonious. Break the list into your 30s, 40s, 50s, etc. to ensure the achievements correspond with your wealth-creation and lifestyle benchmarks. If you don’t plan for it, you likely won’t experience it. For some ideas, check out our list of 40 Things to Do in Your 40s!
Check your health
Your health is everything. You know who says that most often? People who’ve been sick. You may wonder what being in good working order that has to do with wealth. Well, for starters, you can’t get richer if you’re falling apart at the seams. Think how bitter it would be to discover that you’re in tatters by the time you’ve achieved your goals. So keep it simple: A balanced diet, some good exercise, sufficient sleep and regular doctor and dentist visits for checkups and at the very first sign of a problem. And it wouldn’t hurt to regularly take these 10 Home Health Tests That Could Save Your Life.
Define what will make you happy
When imagining the sort of wealth you want to create, consider the minimum fortune you’d be happy with. Hungering after a nest egg is good, but if your appetite is too big or out of step with how you want to live your life, you risk a raft of serious consequences — jeopardizing your relationships, health and well-being, for example. Every day, try to incorporate these 25 Ways to Be Happier Now.
Don’t always sweat the small stuff
You don’t want to be pennywise and pound foolish. Spending hours accumulating savings may not be your wisest way to build wealth. Investing those hours in gaining a deeper understanding of investing — or actually investing — may be a much better idea.
Get a good financial advisor & accountant
An hour of consultation may look expensive, but consider that, over your lifetime, one insight from that meeting might create tens or hundreds of thousands of dollars of wealth. You’ll need a financial advisor that will look at your wealth from all angles, including your investments, career, business, home, family and will. As a doctor does with your physical health, you want an advisor and accountant that take an holistic approach to your wealth creation. In addition to taking their advice, make sure you’re doing these 25 Things Rich People Always Do!
Know and improve your credit score
At some time in your life, you’ll probably need to borrow some cash. Even the wealthiest people and businesses borrow funds to create greater wealth. Don’t wait until you need to borrow to check your credit score. Do it when you don’t need to borrow. If your score could be improved, adjust your plans to better it.
Keep an eagle eye on expenses
It’s easy to drift into a situation in which you’re no longer living within your means. Take a stern view of what’s really necessary for your life by making a list of priorities. Make changes while you’re still well funded. Also consider whether you should be investing what you are spending on discretionary items — every little bit helps in building wealth. Here are some easy tips on How to Cut $10,000 From Your Annual Expenses.
Think about saving versus craving
Whole industries are built on blurring the lines between what people want and what people need. Spending $5 on a coffee, when you can make one at home for less than a dollar, may be a craving that’s better saved. With any purchase, ask whether you truly need it.
Live your life fully
OK, so here’s the immediate caveat to the previous point. If a $5 coffee really puts you in a great mood and/or bolsters your productivity or creativity, it may actually be wiser to enjoy one. Don’t completely deprive yourself of anything you’ll miss too much, such as good food, fine wine, the occasional vacation and regular time with family. Those are just a few of the 50 Things You Must Do Before You Die!
Care for your assets
Otherwise sound investments in homes and other tangible assets can go bad if you don’t maintain, preserve and update them in a smart way. A car in good condition will command a much higher resale value for example. Being organized and healthy is also conducive to wealth creation.
Don’t take your foot off the gas
If you aren’t working at growing your net worth, it might idle out. Every waking hour can be strategically invested in wealth creation. That’s not to say leisure isn’t a necessary investment of your time — we all need downtime to recharge our batteries. Play hard to work hard to play harder. That’s just one of the ways the 1% stay on top — for more strategies, try these 8 Proven Resilience Builders!
Ask yourself if home ownership is really right for you
Your home is probably the largest purchase you’ll ever make. Most of us can’t afford to buy a home outright, so a mortgage is the only option. Consider the pitfalls of home ownership versus renting — maintenance, taxes, and other fees can drain your account and time. Generally speaking, a home can be one of the best investments you make, but plenty of people have lost their shirt in real-estate deals gone bad. Decide if home ownership suits your specific needs.
Accumulate wealth gradually
Commit to a life of slow and steady wealth development, not the hope of a sudden windfall. You might need to institute some austerity measures at first, which sounds neither fun nor glamorous. But some of the richest people in the world have accumulated wealth without flaunting it — Warren Buffett, for example. To find out the secrets of Warren’s success, check out these Get inspired by these 25 Life-Changing Lessons from The World’s Most Creative Men!
Think hard about vacation homes and boats
Although a summer home or a boat may make good lifestyle investments, typically neither are good financial investments. Boats cost a lot and once you possess one, they can often become watery money pits. Holiday cottages and second homes can cost a fortune to maintain. One needs to consider owning versus renting someone else’s vacation home. If you think you will be worried about the costs of maintaining a holiday cottage, then you should probably rent or stay in hotels instead.
But do take vacations
As previously mentioned, you should live your life fully. Don’t skimp on taking time off for a vacation to recharge. A getaway is a necessary time for your mind to destress and change gears, but it can also be valuable to view your life from afar. That break from work can be a fantastic opportunity to take a different perspective on your wealth creation to ensure that everything fits together and you’re on track. (Why not look into these 8 New Luxury Vacations?)
Stay in control
No one will care for your wealth as much as you do. Be careful about committing too much of your nest egg in a particular direction. You want to ensure that there’s some safety built into your plans and that you understand the end goals. For example, have an exit strategy for an agreement with your financial advisor so you’ll avoid catastrophic consequences.
Understand taxes, deductions and refunds
Uncle Sam wants as much of your wealth as he can take. But don’t let that deter you from wise tax planning. Many opportunities may be too complex to understand, and that’s when you may need an advisor to help you understand the consequences of some decisions that may only arise after you retire. And make sure you’re observing these 5 Ways to Avoid An IRS Audit!
Think about death
Inheritance is often the quickest avenue to wealth creation that many of us may have. If you’re likely to be on the receiving end, be cautious about relying too heavily on it. You might be disappointed. Planning for a wealthy life without it is the shrewdest idea. Then, if and when you receive one, consider it a bonus. Also: Tax planning for the recipient and giver is a must — lacking strategy in this area might result in the government taking the lion’s share.
Make a lifelong commitment to wealth
Like a healthy diet, wealth creation must become an integrated part of your lifestyle. You’ll want to invest and build wealth for the long term. This doesn’t imply that you make an investment and hope it’ll grow miraculously on its own. Like a home, car, your kids or pets, you need to care for your investments, measure them, feed them and adjust them. A good start: These 5 Money Moves to Make Now!
Commit to saving 10% to 30% of your after-tax income. It isn’t just about putting your money in a savings account — it’s about putting that money to work in investment vehicles that may reap big returns over the long term.
Mind your business
Many of the richest people in the world have started their own businesses. They knew it was high risk but could also deliver high rewards. Many businesses fail, however, and that should be considered as a distinct possibility when you start up. Also factor in the increased commitment entrepreneurship will require and whether it’ll suit your personality and lifestyle. Get inspired by these 25 Life-Changing Lessons from The World’s Most Creative Men.
Look into Social Security and annuities
We live in changing times, to say the least. Understand what subsidies may or may not be available to you when you retire. The younger you are, the more skeptical you should be of relying on what’s currently available. In fact, it may even be safest to assume there will be no subsidies by the time you retire.
Stay focused on finances
There are several easy-to-use apps which will help you track your finances and run your personal accounting like a business. Mint (mint.com) is a particularly good one. Link up your accounts, assets and investments, then step back to take a view of how all these parts are working together (or how they aren’t). At root, building wealth is controlling costs and developing income and assets. Look into these 6 Great Personal Finance Apps for 2016.
Plan for emergencies
You will experience an emergency in your lifetime, so be prepared. You may lose your job and need to cover living expenses from your savings for several months. To prevent a drama from becoming a crisis, know what expenses you can cut in a time of emergency and what contingencies may exist for the large expenses. Sock away enough for six to eight months of living expenses.