Building wealth has more to do with financial habits than with the job title. In this blog, we will share some of the habits that most successful people share.
- Set clear financial goals
Our mind is a powerful tool. When we clearly understand what we want and have a good reason behind our goal, our brain cannot resist. In doing so, the mind will have a clear purpose on which to optimize and focus efforts. While this is important, setting the goal is just a starting point. What drives real progress is to align our actions with our goals. To achieve a financial goal, the very first step after setting it is to outline a detailed plan like the weekly or monthly actions it will take to reach your goal.
Creating wealth is almost impossible without investing. Avoid buying assets that gradually lose value over time and use your income to buy appreciating assets like stocks and real estate. Investing is not just about timing the market. Investing is a long-term mindset that consists of being aware of the market and spending a lot of time in it, rather than catching the random ups and downs of the market at the perfect time. However, investments don’t have necessarily to be in the financial market. Many sectors offer a variety of investment opportunities. By turning investing into a habit, you will be able to save money from unnecessary expenses while growing it over-time.
Never leave the latter to chance, but prepare proactively for emergencies and side events. And remember, building wealth is one thing but conserving it is a completely different thing. Whether it’s a medical emergency, a stock market crash, or a sudden layoff, there are ways to protect yourself from financial deterioration. Following are some of the most useful disaster-proof strategies you can use:
- Have an emergency cash fund equal to at least two months of income;
- Find and choose the right health insurance plan;
- Protect your income with disability insurance;
- Protect your family with life insurance;
- Protect their inheritance with an estate plan.
Without being prepared for life chocks, it’s all too easy to blow up your financial goals when an inevitable surprise strikes.
Preparedness for emergencies can also be done through diversification of investment but also of income. If you only have one source of income, which is usually a salary, your entire financial future depends on your ability to maintain that income. The moment you lose your pay check, you’ll fall badly. Successful people don’t have this fear. If they lose one source of income due to a surprise event, such as a recession, they have others to help them pay the bills and continue to save for retirement. Some of the additional income streams:
- Own income-generating assets (real estate, stocks and bonds, etc.);
- Transform your expertise into a consulting or coaching business;
- Create Scalable Business Through Writing, eBooks, and Classes;
- Leverage your network to find good companies to invest in;
- Start an online business;
- Explore online trading.
- Invest in professional help
Another great tip, especially for novice investors, is to invest in professional advice. When you are short on time to do your own research or when you need advice, you can always seek professional advice.