You’d love to be wealthy, right? But then immediately reject the idea as ridiculous. Let me assure you, creating wealth’s a lot simpler than you think. And you don’t need a lot of money to start.
What you do need is enough discipline to obey The 3 Rules of Wealth:
1. Spend Less—never spend money you don’t have. If you can’t pay off your credit cards in full each month, stop using them.
2. Save More—pay yourself first. Ideally, 10% of your income goes straight into savings. But $10 a month is totally fine. The idea is to get in the habit of saving.
3. Invest Wisely—put at least a portion of your money into assets will grow faster than inflation and taxes take it away, like stocks, bonds and real estate.
All 3 are critical. But Investing Wisely is how wealth is created. It’s also the rule that stymies most people.
The secret to Investing Wisely is learning the basics. And I promise, it doesn’t take a lot of time to get smart. For decades, I’d read books, go to classes, only to give up in total confusion.
Then I devised an ingenious plan to cut through the overwhelm. It’s only 3 steps. The key is consistency. Practice them for four months and you’ll be amazed at the results.
1. Every day read something about money, even if it’s only a minute or two perusing the headlines of the business section or skimming a paragraph in a financial book before bed. So much of getting smart or smarter about money is familiarizing yourself with the jargon and current trends.
2. Every week, talk about money, especially with someone who knows more than you. When was the last time you sat down with friends or colleagues and asked how they learned about finances, what mistakes they made, the smartest thing they did, and any other advice?
3. Every month, save, automatically. Simply fill out a form (easy to do online) and your bank will automatically transfer money each month from your checking account into a savings account. You don’t miss what you don’t see. Automate your investing too, by dollar-cost-averaging, or regularly transferring a certain amount to your brokerage account.
These three simple rules will put you on the road to becoming a Wealth-Builder if you practice them diligently.
Do you believe you can learn to Invest Wisely? Why or why not? Leave me a comment below.