8 Ways to Build Wealth in 2018!
We all start the year with a desire to change and grow.
If your goal this year is to build more wealth, here are a few things you must do!
1. Determine goals
What does more wealth look like? Do you want to increase your retirement contributions? Pay off debt? Increase your emergency savings? Purchase investment property?
Write down your short-term and long-term goals along with actionable steps.
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Check in on your goals every 1-3 months.
2. Automate Savings
By paying yourself first, you force yourself to save and then use your energy and attention to decide how you want to spend the rest of what is available.
It may seem simple but even basic decisions such as deciding how much you want to save each month can produce a lot of anxiety and most individuals tend to avoid the things that make them anxious or uncomfortable. Therefore, automating is a process that eliminates the ability to have your emotions influence your decisions.
3. Track Spending
Most wealthy individuals know how much they spend as this information is essential to increasing their net worth. Use apps such as Mint and Personal Capital.
4. Create Multiple Streams of Income
In order to build real wealth, we need to have multiple streams of passive income in addition to living within our means. It is not enough to spend equal to what we earn. We need to spend significantly less than we earn and we need to make our money work for us with minimal time and effort on our part.
3 ways to create multiple streams of income is to invest in stock, real estate or a business.
Ideally, you should capitalize on all these strategies to create multiple income streams and grow your wealth far beyond what you could make at your job. All these options require you to educate yourself, commit time and money, and take some risks. However, the long-term payoff far outweighs any possible downsides. Read more on these 3 strategies here.
Frequently, people assume that investing is too difficult, without ever trying it. When we assume something is too difficult, we disregard or avoid it because the thought alone is overwhelming.
Saving for something that is not immediate and abstract can also be difficult. Putting a percentage aside versus trying to reach a set number goal can make it difficult to stay motivated. We are more likely to avoid or procrastinate these goals. This is why most people delay saving for retirement. Read more about this here.
We use the Acorns app to invest our spare change; it is very simple, easy, and also very motivating to see how much spare change can accumulate and grow over time. This small habit alone can make you consider other investing options and since it is automatic, there is nothing you are required to do after your account is set-up.
5. Change your habits
Most people want to be wealthy and successful, but never evaluate how their habits are keeping them from achieving the things they want in their life.
We recently wrote about 7 important habits to start in the new year. These include sleeping a full night on a regular schedule, reading regularly, practicing gratitude and mindfulness meditation while surrounding yourself with successful people.
We’ve dedicated other posts to many of these habits:
Our post on sleep explains how it can lead to more productivity and success. Research shows that insufficient sleep impairs your ability to come up with new ideas, think outside of the box, concentrate and avoid distractions. People who are sleep deprived make more mistakes when remembering information and are less resilient to sudden unexpected changes. Read more about sleep here.
Our post on mindfulness meditation explains that this practice allows us to focus on the now, how we are currently feeling, what we are doing and what is on our present mind. There is a lot of research on the cognitive benefits of mindfulness meditation including less stress and psychological distress, more focus, and better well-being including an increase in immune functioning. Read more here and here.
Food affects our mental and emotional well-being such that certain foods are linked to depression and anxiety. Our post on food habits explain how a poor nutritional diet can make us more ineffective at our jobs and we become more likely to need increased time off work. When we go long periods of time without eating we also lose our hunger and satiety cues (regulated by the hypothalamus in the brain) and are more likely to eat when we are starving and less likely to stop when we are uncomfortably full. Read the 7 food habits that can make you more successful here.
Additionally, if you want to learn about specific habits of the rich, read here.
6. Get over your fear of failure
Fear is supposed to protect us from harm and keep us alive. It does this by activating the sympathetic nervous system into an acute stress response. When this happens we experience a physiological response (heart racing, shallow breathing, sweating, etc).
Failure, if we allow it, can damage our confidence and our hope for the future. Therefore, if we believe there is a possibility of failing, the fear of becoming a failure and feeling disappointed becomes too threatening.
Read the 4 ways to overcome fear of failure!
7. Negotiate a raise
The easiest way to increase your income is get a raise or promotion. But the reality is that more than half of individuals do not ask for a raise. They may feel anxiety or fear and these emotions keep them from increasing their earnings. This may be due to a fear of rejection. Fear of appearing greedy. Fear of confrontations. Fear of offending your supervisor or employer. Low confidence or low self-worth.
8. Practice self-care
Self-care is about listening to our body and not ignoring it. It is about giving our physical, mental, and emotional body what it needs. Along with the basics, the important thing is to also find the things that we connect with, the things that make us feel happier and calmer, and then do a few of those things every day. Read more about why self-care is important and ways to practice self-care before and after work, during work and on your own time.
It’s very important to not let stress ruin your finances!
However, it is impossible to completely avoid stress. There are some things we can do to reduce our stress to more manageable levels and limit damage to our health and finances. Read more here.
A journey to financial freedom is impossible without the right tools. Here are 8 products and tools we recommend.
Here are our top products and tools to build wealth!
If you find yourself lacking motivation, read our post “5 Powerful Strategies to Conquer Lack of Motivation“