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Feb 19

Effective Ways to Grow Your Personal Wealth

Reading Time: 4 mins

Growing your own wealth is no easy feat. You need a lot of discipline, hard work, and determination. You also need to be wary of some of the risks you take, as they might put you on a downward trajectory. With that being said, anyone can achieve their financial goals if they pay attention to the journeys of some of the most successful individuals in the world. Check out these tested-and-tried secrets to help expedite your journey to financial contentment:

 

1. Invest wisely

If you are interested in the stock market, your success will be determined by your ability to spot limited-edition opportunities and stocks that can weather recessions. This might prove too draining for someone who has more responsibilities than buying and selling stocks. You might need some assistance, or better yet, a stock screener to help you execute your filter-down strategy. There are numerous best (free) stock screeners out there that you might want to give a try. Take the time to assess the market to ensure you choose something that best suits your needs.

Check out our investment section here. 

 

2. Avoid personal debt

While there’s nothing wrong with borrowing, it is worth noting that nothing can destroy your net worth in the long run quite as much as personal debt. If you have to borrow, use the money on something that can generate more money. In a word: invest. Using borrowed money to buy a car or anything that depreciates is something you should avoid. When it comes to investments, make sure to inject your money into worthy risks, given that borrowing is not free.

 

3. Rent when you can

The focus on owning a home can take a massive toll on your financial objectives. It is something you will need one day, but if you live in a big city where real estate prices are sky-high, renting might align better with your savings plan.

 

4. Have a short-term plan

The most lucrative investments are those that are focused on the long-term. If you have a long-term strategy in place already, then perhaps you should have one for the day-to-day expenses. In the short term, you should focus on creating more income channels and improving your skills. Investing in your education makes you more valuable in your day job, increasing your chances of promotion and better-earning power.

 

5. Be acquainted with the economy’s dynamics

The general economy’s situation affects a number of things on your personal financial progress. You ought to know things such as when the interest rates usually go up and when they go down. You should also have a nodding acquaintance with inflation and the market cycle, and the drivers of these concepts. There are many books out that can give you a summary of how investing and the economy work. Spending some time on sites such as Investopedia.com might also help.

 

6. Have a savings plan

A savings plan is vital because saving has never been easy. A savings plan helps you to build your wealth over time. When starting, try to save what you can. As time goes by, you can allocate more money to your savings. One easy way to save is to have your savings automated. Deductions are made straight from the salary before you access it. If you’re a lazy saver, this is a great option. Banks and financial institutions offer savings plans that you can adjust to suit you. Pick one and get started.

 

7. Diversify your Investments

Saving is a great way to accumulate wealth but investing makes a huge difference to your financial game. Making investments can grow your wealth over time. Investment is like planting your money and channeling it towards growth. There are several investment plans like the stock market, bonds, and securities that you can try. Investments can be a tough call. Make a good plan, or better yet, get hold of a financial advisor to help you make the right decisions.

 

8. Venture into entrepreneurship

If you want to grow your wealth, consider entrepreneurship. Venturing into a small business can help you up to your income. Identify a need and come up with a way to satisfy that need. There are so many small ventures that you can start with little capital and make you money.

When growing a business venture, you need patience. It takes time for a business to grow. However, if one business does not work out, do not hesitate to start another. Many business owners and moguls tried their hand on several ventures until they found one that made them prosper.

 

9. Try real estate

If you want your wealth to grow, try real estate. You do not need to have a lot of money to start. Many people start by flipping houses. You can improve your home and later on sell it at a higher price. You can make good money buying and selling homes at a profit.

Creativity is vital when renovating a house as you have to work with what you have. Look into neighborhoods before you invest in real estate. Some hoods are unfavorable and may cost you money.

 

10. Save on cars

Cars can take up a sizable amount of your income, and learning how to save on car costs can help you build your savings. Every year, car manufacturers present new models with great features, but these models come at a higher price.

When buying a car, look at its fuel consumption, maintenance and insurance costs. Consider the amount of money you want to spend on fuel, and buy a car that will not stretch your budget. You can also choose to buy your car out of savings rather than taking a loan. Loans make you pay a higher amount of money than what you planned to spend. You do not need a fancy car that you can barely afford.

 

Endnote

There is no shortcut to increasing your net worth, and there is certainly no formula. However, with the above tips, you put yourself in a better position to manage your wealth and thrive financially.

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