Rich Habits For 2020
Sarah Li Cain3-minute read
April 09, 2021
There isn’t one set way to learn how to become wealthy, and applying what you’re going to learn in this article doesn’t mean you’ll amass millions of dollars overnight. In most cases, slow and steady can win the race, and when you reach the net worth you’ve always dreamed of, it’ll be worth it.
So here they are: five wealth-building habits you can adopt starting right now.
Invest First, Then Use Leftover Cash
Sounds obvious, right? However, many people tend to budget for their expenses first then put leftover cash to their investment or retirement accounts, if any at all.
The trouble with that is you may not save as much as you want. Sure, you may have an employer-sponsored plan that already takes a portion of your paycheck, but if you want to be rich, you’ll probably need to be investing more than you are right now.
Instead, take a look at your paycheck to see how much you can invest without stretching your budget too tight. Assuming you have an emergency fund – if you don’t have money set aside for the unexpected, start saving now – it’s safe to assume you can invest whatever you’re not going to spend.
To ensure you invest first, request that more be taken off in your employer-sponsored plan or set up direct deposit so that it’ll go to your retirement account whenever you get paid. That way, you’ve set it up once. You may not even miss the “extra” money.
Find Different Ways To Make Money
Some wealthy folks have multiple income streams to diversify their wealth. That way, if one dries up or isn’t making as much, there are plenty of other ones to rely on.
This isn’t to say you should find multiple side hustles and spend 80-plus hours a week working. Rather, it’s about being strategic about how you’ll incorporate several sources of income.
First, if you work at a 9-to-5 and invest your cash, those are two income streams. Adding an additional one could mean finding a side hustle that works with your strengths and schedule. Other types can include more passive income streams like real estate investing.
Again, the key is to be patient. For example, it may be more effective to get better at your full-time job and negotiate better raises or promotions than get stretched too thin when starting a few side hustles. In other words, get good at one income stream then add more once you feel you’ve got a good handle on it.
Practice The Habits Of Wealthy People
Studying the habits rich people means taking a look at their behavior. There are plenty of ways to do this – reading blogs and biographies or listening to podcast interviews. Doing any of these can serve as motivation for you to go after your own dreams of financial freedom.
Some of the lessons you can pick up from wealthy people include learning to spend on items that give immense value or have decent returns, resisting major lifestyle changes, and constantly searching for ways to improve skills.
Sometimes, even the rich delay gratification. They’re patient and wait until they have enough assets (or cash) in order to purchase or invest in something.
Track Important Financial Metrics
If you want to get rich, you need to know your numbers. It’s not enough to know what you’re spending each month; you need to know your budget inside out. Also get to know your net worth. This number – your assets minus your liabilities – is important because it’ll show you whether you’re on track to financial independence. If you see your net worth increase consistently, it means you’re well on your way there.
Other metrics to look at include your cash flow (here’s where your budget comes in). You want to be able to account for all the money that’s coming in and going out of your accounts to help you see where any leaks are and change course if need be.
Invest in Yourself
Investing in yourself could mean sharpening your skillset to become more desirable to employers, therefore increasing your income. Spending a little time and money on courses, networking events or even reading books can help you gain the know-how and confidence to ask for more.
While investing in yourself can mean you’ll have a better chance to get a raise within your existing company, it could also mean earning a higher salary by switching companies, even if you’re in a similar job role. Or if you want to pursue entrepreneurial endeavors, consistently investing in yourself means being able to figure out how to become successful.
Slow And Steady Wins The Race
Hopefully you understand that figuring out how to get rich isn’t about going fast and hard on your goals. Instead, it’s about being strategic and patient, and understanding that building wealth is a long-term game. Even if you’re feeling frustrated at how slow things might seem to be going, know that every little step you take to build those healthy habits will get you there.
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