7 Steps To Begin Building Your Wealth
Is your money working for you, or are you still working for your money?
No matter what wealth level you’re on, or wherever you find latent cash from, you can put it to use positively and start to gain momentum in your wealth-building journey. And the more momentum you gain, the easier it becomes to put money aside.
It doesn’t matter what age you are, it’s never a bad time to start or review building your wealth. Whether you’re at an early stage or you’re a little further down the line, you can start with these seven easy steps:
#1: Reduce or eliminate your debt
One of the easiest ways to reduce your financial obligations is to find what you can live without. For example, people buy insurance in all sorts of different places and they often get added on almost unnoticed. Whether it’s washing machine insurance, iPhone insurance, or pipe and drainage insurance, this is an area most can quite confidently eliminate. The secret then is to re-apply those savings towards building your assets.
One of our members not only managed to reduce his car renewal by about three hundred pounds annually, but is also now saving an extra hundred pounds a month just by going through and finding little things here and there that he was paying for which he no longer needs.
Listen to the podcast below to find out how to uncover hidden money in your life using D.E.B.I.T.S
#2: Build an emergency fund
This is a savings strategy with a very specific purpose. Getting an emergency fund is really important if you’re at the beginning of your journey so that if something unexpected occurs, like a big bill that comes through your door which you can’t eliminate, you won’t be wondering how to pay for it, and it won’t hamper your wealth-building drive.
We suggest having somewhere around three to six months worth of your normal expenses. And don’t worry too much about making that as a way of building wealth. Just use that sum of money as a cushion, something to fall back on so you feel like that’s locked in. Any extra money beyond that can be used to build wealth.
”Never let a month go by without taking some action to build your wealth”
#3: Get life cover in place
If you’ve got debt or a young family with kids, it’s important to get your life cover in place. It’s usually only a few pounds a month and it will protect your loved ones by maintaining your income should anything happen to you either through illness or death. That can be a really valuable thing to do for future proofing.
#4: Improve your financial IQ
Wealth always begins with education.
If you have recognised the desire to build wealth now and you’re beginning to get a feeling for which assets are appropriate, then you could just simply start investing some of that money in yourself. Having the right education will equip you to create more wealth in the future. The more educated we are, the better decisions we make. At WealthBuilders, we are connected to many avenues of education worth exploring which we’d be delighted to share with you.
#5: Start making an investment
Wealth isn’t built on theory, but rather on action. To do this successfully, you need to be sure to understand the risk you’re taking.
A good place to start is with some form of index tracker fund because you’re investing in the market generally, rather than specific sections. Trackers are very, very low cost, particularly if you use Exchange Traded Funds (EFTs), and are very liquid, so you can withdraw your cash whenever you need to.
#6: Consider premium bonds
Think of premium bonds as the equivalent of playing the lottery, but if you don’t win, you get your money back anyway.
Premium bond access has come down from 100 pounds to 25 pounds. It’s not really a growth maker or wealth builder, but it’s a secure place to park emergency money. It’s underwritten by the government (we would call that “gilt-edged”), so your money’s safe. And of course, you’re participating in a prize draw where you can win a million pounds, so that would definitely be wealth building if you got a million quid in one go!
#7: Make extra money as an affiliate
One of the ways you can build wealth is to get the leverage of the relationship with somebody else whose values you share, whose products you recognize and appreciate, where you could make some money by being a referrer.
We call this an affiliate program. It’s such a common model now, and many people are using it without even realising sometimes. For example, you tell someone about Uber and share a link and boom – you’ve earned a free ride. If you’re really well connected, then an affiliate program could certainly serve other people as well as giving you a nice return.
The secret to building wealth is simply to start…
Everyone who has wealth had to start somewhere. Maybe they started with a few pounds that eventually grew into six or seven figures. Or maybe there were fortunate enough to gain generational wealth and maintain it.
Regardless of your personal journey up to now, you must first choose to start saving and growing your money. A few years from now, you’ll only wish you started sooner.