In recent years, building wealth has become harder for many people, because of several factors including the rising cost of living and stagnate wages. But just because it has become harder does not mean impossible. The basic foundation for building wealth and reaching your financial goals has always remained the same. It all comes down to three, healthy financial habits that you can start today:
PAY YOURSELF FIRST:
Procrastination is the single biggest wealth-killer. Make it a habit of paying yourself first. This doesn’t mean you should buy yourself something nice first, but rather that you should be saving money for your future self. Most people pay themselves last by waiting and only saving what is left over. Set aside a portion of your income when you get paid first before spending any discretionary funds. Automatic saving plans are an easy disciplined approach to reduce the temptation to spend your entire paycheck. You know what you should do, such as contributing to your retirement and saving for long-term goals, like down payment of a new home but there is always some other priority that hinders your progress. So, start by building up an emergency fund for when life happens, like a hospital visit, leaky roof or loss of job. The reason you should have an emergency fund is simple: life is unpredictable. If you’re not prepared, unexpected financial obligations can cause major setbacks on your road to building wealth. Consistency is key to building wealth. You have to put the money aside, and leave it to grow.
SPEND LESS THAN YOU MAKE:
Sounds incredibly rudimental right? But in this age when credit is readily available, it can be very easy to dig yourself into a hole financially. Debt is a burden, sure, but not all debt is bad. Having the right kinds of debt can help you build future wealth. For instance, moderate amounts of student debt can help you get an education to boost your income. A reasonably sized mortgage can help you build equity in a home. Apart from that, you should be careful when adding new debt, and focus on reducing or eliminating unnecessary debts that are weighing you down. For many Americans payday loans, auto loans and credit card debt are among the biggest impediments that prevent them from achieving financial freedom.
INVEST THE DIFFERENCE WISELY:
All investing involves risk. It is a natural component of all investment strategies but you can greatly reduce risk with a little due diligence on your end and investing wisely as a result. The goal for most investors is to minimize risk associated with the investment while trying to return the highest yield possible. That being said, diversifying is essential for any investment portfolio. With all of the market volatility in recent years, most Americans can’t afford the uncertainty of solely trusting the stock market with their hard earned money. Even those looking for low-risk investments face a wide array of options that can become confusing. Investing in government issued bonds, CD’s, money market, savings accounts and annuities are safer. but accrue minimal interest over time. This may not be the best option when you are reminded that inflation is a real thing in our ever-changing world where most economies depend on each other. So you may be wondering, are there other options out there that will keep my risk low yet yield higher returns than a conventional savings account and help me combat real-world inflation? High-yield investment programs, like those provided by Jakob Pek Fund, are fairly new, low risk, opportunities that can jumpstart your journey to building wealth. With a minimum investment, accredited investors can enter into a Limited Partnership (LP), secure an attractive interest rate (a “real” one), and ensure a return that is worth your time and money. It is that simple and it is probably just what you have been looking for.