February 11

7 Basic Rules to Grow Your Wealth Effectively


The great thing about rules to live by, is that they can help turn complicated decisions into easy ones.   How much life insurance do you need?  What portion of your long term saving should be set aside for emergencies?  Is there a way to predict the amount of money you will spend during your retirement?  Knowing the answers to questions like these could take hours upon hours of research and you may not get it right.  Financial rules to live by, can be a helpful shortcut that sometimes can be just what you need. Other times, however, those little rules are a little too simple or just no longer apply. 

If you’ve been fortunate enough to save up some money during the pandemic, how should you use it?  
While no two financial pictures are exactly the same, healthy portfolios do have similarities. Follow these seven rules to grow your wealth effectively...

  • Think of Money as a Tool - Money primarily functions as a medium of exchange.  Because money's usefulness as a medium of exchange in transactions is inherently future-oriented, it provides a means to store value that can be used to obtain goods and services in the future. Thinking of money as a tool empowers you to avoid many of the negative, intense emotions associated with it and make rational, calm spending and saving decisions free of emotions. Money is a tool. That’s it. 
  • Define what “Wealth” means to you - What pops into your head when you hear the word wealth?  Whatever your definition is, congratulations! You’ve established a goal that is yours. Your definition of “wealth” is the one that matters. Like many things in life, looks can be deceiving.  Just because people have an appearance of wealth doesn't mean they truly are wealthy, or that their lives are rich and purposeful.
  • Save - This is frequently repeated advice, and for a good reason- the secret to growing wealth is to accumulate it.  The hardest thing about saving money is just getting started.  One of the best ways to save money is to set a goal.  Pick the right saving tools. 
  • Diversify Your Tool Kit - Talk to a certified professional about the benefits and drawbacks of saving accounts, stocks, CDs, IRAs, mutual funds, and other saving and investment options. The keyword is “Diversify.” The only way to become wealthy is to set goals to grow your money.  Nobody we know has become wealthy from investing in saving accounts alone.
  • Expand Your Mind - Get creative in seeking out ways to increase the income you can allocate for investing.  Your income is your greatest wealth-building tool.  Work hard and increase your income whenever possible--start a side hustle to add to your investment portfolio.
  • Find a Good Accountant - Once you have money, you don’t want to give it away, do you? That’s exactly what you do come tax time.  Tax laws and credits change every year.  While you can file your own taxes or manage a small business on your own, there are some instances where you might benefit from hiring an accountant.
  • Treat Money Management Like a Job - Set aside time each week to review your financial accounts.  There are three important money management levers, all of which you need to review on a regular basis:  Making Money, Saving Money and Investing Money.   Find a way to manage each of these well and you will be making the most of your money and time.

Bottom Line - Take time to study articles online, read a book, attend a local class, join a group that has the same desire to be financially wealthy.

MONEY - Get It, Grow It, Keep It!


You may also like

Increase Your Income

Increase Your Income
{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}