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Financial Freedom

The 5 Best Ways to Build Wealth

Are you searching for the best ways to build wealth in your life? If so, you will come across a wide range of tips, strategies and products that may provide conflicting ideas. This is because there is no set standard to building wealth. However, there are a few important concepts that experts commonly point to.

We’ll dive into these concepts below and help you learn more about the meaning of financial freedom and wealth. Making more money is a start, but it’s not the only piece of the puzzle.

Discover the best ways to build wealth

Discover the Best Ways to Build Wealth

Everyone wants to learn how to build wealth. And they want to make it happen as quickly as possible. So why do so many people struggle with wealth creation?

For starters, Americans continue to build up debt. According to the Brookings Institute, American households held more than $15 trillion of debt in 2018. That number is continuing to rise.

As a result, the wealth inequality gap rises as well. The same report suggests the top 20% of families hold triple the amount of wealth as the middle class.

Are you trying to close this gap? If so, here are the five best ways to build wealth, no matter your current financial status.

  • Calculate your net worth
  • Automate your savings efforts
  • Budget and eliminate debt
  • Prepare for retirement
  • Invest your money wisely

In general, you need to know how much money you have first. Then you need to save as much as you can and make smart investments. Let’s dig a little deeper…

1. Calculate Your Net Worth

You would be surprised by how many people don’t know their own net worth. But you can’t begin to build wealth without knowing where you are in the first place.

To calculate your net worth, begin by adding up the value of your home if you own it. Next, add up your balances in any bank accounts, investment accounts and other assets.

You now need to take that number and subtract all of your loans and debt. This can include your mortgage, credit cards and student loans, for example.

The result is your current net worth. And it’s important to recalculate this number each year. Do not be discouraged if you have a negative number. This is very common for families who aren’t homeowners.

2. Automate Your Savings Efforts

Save your money without even having to think about it. In fact, this is one of the best ways to build wealth.

Banking has advanced to a point where you can automate the savings process. Set up an automatic transfer to your savings account each time you receive a paycheck.

Determine a percentage that meets your specific needs, and the money will begin to build up without you even noticing it. It takes very little effort, and it’s one the easiest ways to accumulate wealth. To learn more about automating your finances, check out The Automatic Millionaire. It makes our top 10 list of the best financial freedom books.

3. Make a Budget and Eliminate Debt

Live within your means. I can’t stress this enough. In the age of social media, this has become one of the biggest problems in America.

However, you shouldn’t compare yourself to Instagram models and world travelers. Set up a budget that covers your food, transportation and monthly bills. You can also budget for any hobbies or other interests that are within your means. Now, it’s great to have this budget in place, but you have to stick to it if you want to build wealth.

In terms of your bills, pay them on time and eliminate any high-interest debt as quickly as you can. Don’t spend money you don’t have. Pay off your credit cards and turn your focus to your mortgage and student loans.

4. Prepare for Retirement

Does your employer have a retirement program with a 401(k) match? Don’t miss out on this opportunity to save money.

The most common 401(k) contribution is 4% of your salary. Some employers will match up to this amount or even more. Therefore, you should take advantage of this opportunity.

And don’t lower your contribution if you are younger. Put as much as you can into your retirement account, and it will pay off in the long run.

5. Make Smart Investments

Investing in the stock market is one of the best ways to build wealth quickly. It’s a form of passive income that can generate huge returns.

But many people have fears of, or are unfamiliar with, the process of buying stocks. That’s why it’s so important to learn more about the stock market.

Set aside money for investing once you feel comfortable. For a broader picture of the benefits of buying stocks and compound interest, check out our free investment calculator.

Investing and Wealth Creation

Creating wealth is a long-term process. Yet, you can fast track your growth through investing.

For daily stock market tips, trends and analysis, sign up for the Investment U e-letter below. We have a team of experts with decades of experience on Wall Street.

Investment U can guide you toward financial freedom by teaching you the ins and outs of the stock market. You can learn the best ways to build wealth fast with the potential to bring in massive returns.


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