Robert Kiyosaki, famous “Rich Dad, Poor Dad” author says:
“You’re only poor if you give up. The most important thing is that you did something. Most people only talk and dream of getting rich…”
Being wealthy or becoming wealthy does not have to be a dream. But it requires planning and action. If you are ready to give it a go, and want to become rich, then here are the top then things you can do today that can make your richer in the future!
However, becoming wealthy is akin to preparing and running for a marathon, not a sprint. With that in mind, read through our top ten ways through which you can build your wealth. You probably won’t yield instant results from following the rules, but they have great potential to propel you to earn more and become wealthier in the longer run:
Don’t buy a car as soon as you get your first job:
Of all the tips that could potentially work for you to become a wealthy millionaire, this one is it. I know it might be confusing, but imagine it this way. Spending your Saturdays getting your car serviced, paying for servicing, paying off a car loan, and spending all that money on petrol, all add up to make an investment in a car more of an ongoing expense. If you take low cost public transport, you can save on several levels, as you take less number of trips to the market (public transport can be a hassle sometimes), you don’t have to spend on servicing, or paying installments, and you can save on the fuel. The downside is to take on the hassle of public transport. However, first few years of using public transportation can help you save up to buy your own car on cash, hence helping you save on installments which jack up the price of the car!
Don’t Buy Stuff That You Don’t Need:
A lot of us have attuned ourselves to spending on things that we essentially don’t need. If you have a habit of eating out regularly, for example, then you’re spending a decent sum of money that could have been saved and invested somewhere. A PKR 1,000 invested on a monthly basis for 30 years can easily sum up to PKR 2,279,325/- at an average annual rate of return of 10%. Get rid of expenses that cut into your income, and don’t add value to your life or lifestyle. Evening out for food every second day isn’t adding any additional value to your social life except for eating away at your pocket.
Track Your Spending:
Tracking spending is a reality check that we all need sometimes, but would generally hate to do so. Try a tracking app like WaveApps or You Need A Budget to define a budget and evaluate your spending trends. In most cases, the common trends include spending on food, clothes and shopping for nonessentials. Try figuring out where you’re spending your income, it will help you realize your extra expenses. Always keep in mind, a PKR 1,000 invested monthly means PKR 2 million, 30 years from now.
Earn More, More and More:
As obvious as this sounds, the more you earn, the more you have the capacity to save! Look for opportunities that help you build extra income. This could be anything from moonlighting to freelancing on various platforms (like UpWork or PeoplePerHour) to content development, and counseling or consulting on the side. Extra income means more to save and invest for the future. A PKR 10,000 per month put in savings means PKR 22 million at the end of 30 years on an average interest rate of 10% per annum!
This is the primary rule of thumb most people in their 20s and 30s tend to forget. Saving is about keeping aside a small budgeted amount from your income that becomes your rainy day fund and your investment into your future. Financial experts and advisors generally give a rule of thumb that 30% of your income should go into savings. A good savings option is to have a standing order given to your bank that a sum of money from your income be deposited into a savings account immediately as your salary is transferred. Most banks in Pakistan offer a standing order transfer at a minimal fee. Needless to say, a savings account that is difficult to access through a ready and available ATM card, quickly becomes a beneficial saving tool.
Whatever you save, should ideally be invested in schemes that give you returns according to your risk profile. What is a risk profile you may ask? That’s the extent of risk that you feel you can undertake in order to earn a certain return on your money. Think of it this way, would you invest in Government savings schemes and bonds or in the stock market? Or would you take a middle path that gives you some sort of certain or at least stable returns but does not give you heart attacks when the stock market crashes? That is your risk profile in the most layperson terms as you can get! Learn to invest by evaluating options available in the market. Our blog has tons of tips and definition of options from insurance, to systematic investment schemes, and from mutual funds to pension funds, that you can learn from.
Tackle Your Debt:
Debt eats away at your savings, and at your potential to save as well. Don’t think about debt and credit cards as an option to pay for expenses, consider them as an opportunity cost for what you haven’t saved today. For example, spending a PKR 1,000 every month, makes you lose a total of PKR 2 million (refer to the calculation above!). This also means that every single time you spend more than you earn, you’re eating away the pie from your next month’s income as well – it becomes a never-ending cycle of debt if not controlled.
Work Hard Today:
Working hard today means better opportunities in the future. This is not a guarantee, but working harder and smarter today amps up your options to find better opportunities in the future – be they better job prospects, better business opportunities or better networking to find more side hustles. Working hard today is the equivalent to investing your self today, to reap financial benefits in the future.
A bachelor’s degree is no match for the overqualified, confident, and experienced people out there in the world. Talk to anyone who’s in the professional world, and they would’ve finished their MPhil, are well into their PhD, or are working on extra certifications, to amp up their career game. Educate yourself, as this helps potential recruiters to foresee that you’re going to be a better choice than somebody who’s completed their bachelor’s degree. Why do you think a Chartered Accountant or an Engineer earns more in the longer run? That’s because their degrees are specialized in nature. Plus, their learning never stops. Think on these lines to work on your education, and better job and earning prospects will open up for you.
Market Yourself Like Crazy:
This is as bizarre as it sounds. How can marketing you and networking help in building wealth? Well, think of it this way. The more you network, the more you find out about key business and career opportunities, the more you find out about financial investment opportunities and the more people remember your name to refer you forward. Networking and marketing yourself is key to landing better opportunities at all times – wealth and money is a great byproduct!
We know that these may not have been your key wealth building tips that you were expecting, but these are the top ways that you could use to plan your financial goals on. A solid hustle plus savings plus investment plan can help you become a millionaire, easier than spending time on finding get-rich-quick fixes.