17 Wealth-Building Strategies to Implement Today
Investment U has been helping millions of subscribers grow their wealth for more than two decades…and we want to help you too! If you’re interested in increasing your wealth, here are 17 wealth-building strategies you can start using today.
17 Wealth-Building Strategies
1. Practical Optimism
“Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence.” – Helen Keller
One of the most important wealth-building strategies is optimism – waking up each day and saying, “Today is going to be a great day.” No matter how gloomy your financial situation may currently look, you can turn it around. Here’s where the practical part comes in. Patience is key. If you’re $200,000 in debt and have a very low income, blind optimism isn’t going to save you. But through discipline, steadily increased income and budgeting, you can chip away at that debt slowly until it is completely gone.
The same goes for investing. If you play the long game and follow practical wealth building strategies, you can achieve wealth beyond what you could have ever imagined.
2. Play the Long Game
No matter how you build your wealth, it doesn’t happen overnight. Whether most of your savings came from stocks, a large salary, real estate investments or something else, it takes time to grow. Now, that doesn’t mean there won’t be short-term winners. We recommend keeping up with the latest trending markets, such as pre-ipo investing and short-term bonds, to name a few.
However, your primary wealth-building mechanisms will be patience and a diverse portfolio of time-tested investments.
3. Dream Big: The American Wealth Building Strategy
“All our dreams can come true, if we have the courage to pursue them.” – Walt Disney
It is true that without dreaming, you cannot envision yourself becoming financially free. You cannot see yourself as a success story or as someone who has built great wealth. Many people limit themselves by telling themselves that they can’t do something before they even get started. Having a purpose in life is extremely critical to who you are and who you will become. Start by writing down your goals.
4. Write Down Your Goals
Writing down your goals is another crucial wealth-building strategy. During your entire wealth-building journey, you’ll want to have your goals well documented. An idea that is in your head alone is a dream. Once a dream is written down, it becomes a goal. Once your goals are achieved, they become realities.
One of the greatest realizations we can have as humans is that we are working toward something greater than ourselves, getting better each day and learning more about ourselves and the world. No matter where you are in your financial journey, you can reach your financial goals. We are here to help.
5. Avoid Going Into Debt
One of the most obvious ways to NOT build wealth is by giving your hard-earned money away to someone else in the form of debt. Whether it’s a student loan, car payments, credit cards, bank loans or mortgages… the sooner you can start putting that money in your bank account instead of someone else’s, the sooner you will be on your way to building wealth.
Use the debt snowball method and eliminate your smallest debts first.
6. Build Long-Term Wealth by Investing
Investment U – the name says it all. We are committed to educating you on all things investing. A recent National Study of Millionaires, found that three out of four millionaires (75%) said that regular, consistent investing over a long period of time is the reason for their success.
Investing at least 20% of your income is a fantastic way to build wealth for the long haul. Creating a diverse portfolio that fits your appropriate level of risk is a surefire way to grow your nest egg.
“The keys to building wealth need an ignition to really get going. This is where your passive income comes into play. Making smart investments is the best way to build wealth quickly.” – https://investmentu.com/keys-to-building-wealth/
7. Always Have a Budget
During your financial journey, a budget is absolutely essential. This will allow you to allocate the appropriate funds for expenses, saving, leisure, giving and more. The more you can save or put toward investments and income generation, the faster you can build wealth.
Even the super-rich have budgets. The more wealth you build, the more difficult it can be to maintain it. Keep this in mind as you grow your savings. You’ll want to actively manage your wealth, so it doesn’t manage you. As your wealth grows, make sure to increase your budget accordingly and enjoy your life. Many who have lived on a tight budget their whole lives have trouble spending money when they eventually reach a place to do so.
Having money in the bank means you can live more financially free and give more generously. The budgetary restrictions you implement now will allow you to live a rich life in the future and hopefully leave a legacy for generations to come. Budgeting should always be part of any wealth-building strategy.
8. Spend Money on What You Love
Now that we’ve talked about budgeting, let’s talk a little about spending. Understanding where your money is going allows you the ability to spend money on what you love. Part of building wealth is becoming more self-aware.
For example, if you are a guitar enthusiast, you’re likely dreaming of owning a vintage Stratocaster or Les Paul. Instead of going out to a fancy dinner once a week, use your budget to direct those funds toward saving for that guitar. A general rule of thumb is that if you’re going to spend a decent amount on something, it should be something that brings long-lasting satisfaction – not something fleeting or short-lived.
The wealth-building part comes in when you factor in motivation…
17 Wealth-Building Strategies: Continued…
9. Celebrate to Motivate
As you continue to save money and build wealth with these strategies, don’t forget to celebrate… even if the celebration uses only a very small portion of the earnings. Paid off your last student loan? Celebrate. Sent in the final mortgage check? Celebrate. Picked a winning stock? Celebrate. You get the idea. If every single dollar you earn along the way goes toward building wealth, you are saving up to live your life only in the future and not in the present.
Put most of your income toward building wealth but set aside a portion to enjoy now. This will motivate you to continually increase your income. It will also allow you to gradually ease into your wealth as you start to enjoy the fruits of your labor.
10. Maximize Income Streams
Make sure all of your income streams are working together to build wealth. In addition to your salary, bonuses and commissions, side hustles and incentives are great ways to add extra active income.
On the passive side of things, you have rental properties, royalties, maintenance fees, dividend stocks, peer-to-peer lending and affiliate marketing, to name a few. A well-managed set of diverse investments is a great way to maximize continuous income.
11. Continual Education – Wealth-Building Strategy
Continual education does not necessarily mean graduate degrees. In fact, the vast majority of the applicable knowledge you’ll gain throughout your life is found through experience, connections and motivated research.
The most important wealth-building strategy for your career is to have a deep desire to become extremely knowledgeable and innovative in the areas that you are most interested in. No matter what your career path, there is so much information out there that can help you along your journey. All you have to do is be committed to learning more each day.
12. Maximize Tax Savings
As the old saying goes, “It’s not what you make, it’s what you keep.” Pay your taxes on time as the law requires, but please do everything you can to keep as much of your hard-earned money as possible. There are so many tax-saving tips out there that can literally save you thousands.
Here are a few: https://investmentu.com/3-tax-savings-tips-2020/
13. Reinvest Your Profits
As your financial knowledge grows, so should your bank accounts. There are many ways to reinvest your profits. If you run a business that had a great year, consider using that revenue to improve areas of the company that will allow you to become even more profitable.
14. Connections Are a Key Wealth-Building Strategy
In addition to growing your overall financial knowledge, you’ll want to surround yourself with smart, talented, driven people. You may have heard before that you are “the average of your five closest connections.” Whether that’s true or not doesn’t change the fact that humans thrive off of influence.
There are so many ideas floating around out there… Make sure you are filling your mind with the right ones. Reach out to like-minded, motivated people. Go to networking events. Build a community of wealthy practitioners around you. The relationships you build now will propel you into a glorious future.
15. Interest Rates
Interest rates are a huge factor when building wealth. If you are borrowing money at a very high percentage, you are allowing interest to be your enemy. On the flip side, putting your money into funds, accounts or other investments that have a high yield percentage can have a massive compounding effect over time.
Let’s say you have $1 million in a CD. If the interest rate is 5%, you will be getting $50,000 payouts each year. This extra interest can be left alone for future use, invested or used to make educated decisions on philanthropy, side work or retirement.
16. Risk Management
One of the most important strategies when building wealth is understanding risk. Your ability to build wealth is only as good as your ability to keep it. Avoid risky investments that could jeopardize your financial freedom.
Plan for the unexpected with a large emergency fund. This will mitigate the risk if you are faced with large medical bills, a large home repair or other unforeseen events.
The other side of managing risk is taking enough risk. Once you have enough savings and feel comfortable, consider increasing your level of risk to maximize investment returns.
17. Spend Your Time Wisely
“We all get 24 hours a day… It’s up to us what we do with those 24 hours.” – Sam Huff
Arguably the most important wealth-building strategy on our list is to spend your time wisely. The amount of people who waste their time on activities that have no beneficial impact on their life is astounding. Spend time learning, reading, surrounding yourself with the right people. If people simply replaced the three hours a night they spend watching reality TV with three hours of sound, actionable financial advice, imagine the impact it would have.
Don’t let another day pass without taking the steering wheel of your life. Signup for our free Investment U e-letter today and we will help you build the rich life you have been longing for.
Read Next: What Does It Mean to Build Wealth?
About Ben Broadwater
Ben Broadwater is the Director of Investment U. He has more than 15 years of content creation experience. He has worked and written for numerous companies in the financial publishing space, including Charles Street Research, The Oxford Club and now Investment U. When Ben isn’t busy running Investment U, you can usually find him with a pair of drumsticks or a guitar in his hand.