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This question keeps popping in my head now a days. What do we need to do to become rich? What is being rich?
I’m wondering how others have become rich and how they could afford to just buy anything they want and travel and keep on spending.
I’ve searched the internet for answers and I’m going to share with you what I’ve learned so far.
What is Being Rich?
Being rich depends on how you define it. Some people define rich as being financially independent, being able to control your time and not trade time for money.
Some may define being rich by reaching a certain net worth like reaching million or billion dollar net worth or more.
Get a clear definition of what being rich is like for you, then set plans and goals to attain that rich status.
It will take time, discipline and a lot of effort to get there.
How Do You Get Rich?
The answer was easy to say but very difficult to do. If you’ve read Rich Dad Poor Dad by Robert Kiyosaki it boils down to buying assets.
Assets are things or anything that puts money in your pocket or bank account. That is the simplest step to becoming rich.
If you buy assets you become rich. You’ll need to identify assets and keep on acquiring assets and in the long run it will grow and have your own money tree bearing money fruits.
How Do I Buy Assets?
Invest in your knowledge and skills to earn income like what Dave Ramsey teaches. Income is your number one tool to become rich.
You’ll need money to make money. The more income you have the more assets you can buy and in turn the more money you can potentially make.
How To Become Rich Step By Step:
Step 1: Right mindset
First and foremost you need to believe in yourself that you can change your financial destiny. Only you can do this.
If you’re reading this, congratulations! You’re on your way to start learning how to build wealth. Always keep an open mind and keep on learning from other wealthy people.
Believe that it is possible for you to become wealthy. Never limit your capabilities and your mind.
Building wealth takes time, you have to be patient and you have to believe that you can do it.
Caution: If something sounds too good to be true, then it is probably wise to stay away from it. Educate yourself on what works and what doesn’t.
Don’t get yourself scammed, getting scammed will pull you back from your financial freedom. Always do your research when you try things from the internet especially those get rich quick stuff.
Get-rich-quick schemes are very risky and they may work for some people. But most often, even more people lose their investment money on those schemes.
If you believe that you can become wealthy, then proceed to the next step.
Step 2: Have an income
You will need income to be able to buy assets. This will be your first step to become rich. Invest in yourself, teach yourself how to make money.
Find ways to enjoy making money. Get a job, do side hustles, become an employee and turn your service into money. This is just the first step.
Click on the link below to learn
How To Start A Blog as a Side Hustle…
And keep on working to increase your income. Ask for a raise or work hard to get promoted or look for a higher paying new position etc. And use this active income to create passive income.
Click on the link below to learn more
My Passive Income Journey…
Be careful with lifestyle creep, this usually happens when you increase your income. Your expenses also increases exponentially.
Avoid lifestyle creep as much as possible.
Step 3: Plan for the future
Most millionaires didn’t become rich by accident. They planned their financial journey. They have mapped out what they need to do to achieve thier goals.
They have taken full control of their finances and always continue to increase their wealth.
You will need to have a budget. You will need to have the discipline to follow your budget and follow the plan through thick and thin.
The budget will always be up to you. Make a plan that works best for you. You don’t have to follow other people’s plans. You can use them as guide but you have to make it work for you.
Set goals and make plans to achieve those goals. Small wins one step at a time. You can do it. Take control of your financial future and start planning now.
Step 4: Pay off high-interest debt
You will need to take care of your debts in your budget plan. You have to consider that debt are like extra weight you carry in your marathon to financial freedom.
List all your debts according to interest rates from high to low. Then start making extra payments to the debts with the highest interest rates. Dave Ramsey calls this the debt snowball.
When you pay off the first on the list continue to work on your debt list until you pay off all of your debts.
You will keep more money in your pocket once you are out of debt.
Mortgage is a special kind of debt as houses usually gain equity with time. You can put this debt at the very end of the debt list.
Step 5: Start saving money
At this stage you can start on working on putting extra cash aside for emergencies. Make sure you save enough to cover expenses for at least 6 months.
Make sure you only touch this money for rainy days only. You can set up an automatic deduction on your paycheck to go to a high yield saving account.
Write down all your expenses and make sure you live below your means so you will have enough to save.
Step 6: Start investing
You need to start investing as soon as you are able. The earlier you start the better. This will be the step where we buy assets.
Invest early and let time and compounding do their work to grow your money.
Click the link below to learn more about
Investing in a recession…
The easiest way to invest and the one that requires less capital is to invest in the sock market.
Click the link below to learn more about
First step to invest in the stock market…
A Youtuber I follow suggests a 75/15/10 rule. Where you spend 75% of your income. Invest 15% and save 10%. This is just a guide and you can certainly make your own rule that works out for you.
Another way to invest in the stock market is when you put in money in a tax-deferred retirement account offered by your employer eg. 401(k).
If your employer offers a match as benefit, take advantage of that match cause it is free money. Find out how much your employer will match and max it out. I only put in money in my 401k equal to how much my employer’s maximum match limit.
Conclusion: What To Do To Be Rich?
Being rich is subjective and you have to set up your own definition of what a rich person is for you.
The things in here are easy to say but very hard to practice. Once you have achieved the steps, you can start to gain more control of your time and then you can spend your time doing things you love.
There is a final step in the equation that most wealthy people do. And that is to be generous and give back to the community. Be generous and share your blessings.
I truly hope that whoever is reading this post will become rich and that success is just waiting around the corner for you. Be consistent and be patient.
Never give up and always believe in yourself. Thank you for reading this post, see you in the next one!
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