Habits of the rich that help build wealth
Raymond Mwangi: Here are the Simple habits that the rich employ to build wealth
Habits of the rich
Making money is one thing, but creating wealth is an entirely different thing. If you are looking to build wealth that can significantly make a difference in your life, then embracing these simple habits is crucial. They are sure to drive you in the right direction. You’ll find ways to create real wealth by beckoning financial opportunity and potential windfalls through a positive mindset and a sound emotional, spiritual and mental state.
The simple habits for wealth creators:
Invest your spare change
Investing is one of the most effective ways to build wealth and contrary to popular belief, you do not need a lot of money to get started. You can start by simply investing your spare change. Get in the habit of putting that spare change or surprise cash to work, even if its that 500 shilling note you found in your pockets. The miracle of compounding can transform a relatively small but consistent amount of saving to a big one. You should start investing sooner rather than later to take the full advantage of compound interest.
Track your spending
You can’t build wealth if the is more money leaving your wallet than coming in. One needs to learn how to be frugal – spending less than you earn. Most wealthy people can ignore the temptation of renting an expensive house, buying a newer car, gadgets and so on. You need to track your daily expenses to ensure you are earning more than you are spending. A good way to keep your expenses in check is to budget. You can use a spread sheet in your computer or simply record your daily purchases in a note book or your phone.
Pay yourself first
This is an essential habit to wealth building. No matter what income you are generating, you should be paying yourself first before paying any bills. That is, saving a percentage away in a savings account or retirement before anything else. It keeps you focused on saving and investing for your financial goals, before spending it. It gets you in the right financial mindset, you develop good money habits, and starts helping you on a great path to wealth.
Surround yourself with successful people
The people you surround yourself with can have an impact on your mindset to building wealth. Associating with like-minded people, who are interested in investing, finances, and may be high-earners can motivate you more than you realize. Network with people you can learn from that motivate you to have good wealth building habits and can be a mentor to your decisions.
Understand and value good debt vs bad debt
- Good debt is borrowing money to pay for education or an asset that you believe will return more money in the future than it cost you to finance at this moment (an investment like rental properties).
- Bad debt is borrowing money to pay for something that depreciates in value or has no purpose (i.e. consumption).
While some financial gurus will tell you all debt is bad, there are some areas where debt can be good for wealth building. Of course, you should be avoiding high interest debt, like those on most credit cards. But there is also some good debt, that will greatly benefit your ability to skyrocket your wealth.
Set goals and create plans to achieve them
One of my favorite essential wealth building habits is setting financial goals and creating a plan on how to achieve them. These goals are a mix of short-term and long-term, plus new ones will happen from time to time as well.
Obtaining wealth can be challenging without a clear vision of getting there or least processing what you can do. Review your income, assets, net worth, and how you can elevate these items. It can be attainable goals and more challenging ones. Setting goals keeps you honest and focused on your path to building wealth. It doesn’t mean it will be easy as you should be thinking big, but goals and plan will make the path more possible.
Consistently read books about finances and wealth
The key to becoming financially literate is reading books. Books have made it easier for many people to learn and shift their mindsets to build future wealth. Knowledge keeps your brain active and thinking in ways that help you build wealth. Try to spend an hour or two each week dedicated to reading a book related to money, it will help instill and equip you with the right money concepts.
Effective time management
Everyone in this world has the same amount of time. The 24 hours of each day is life’s greatest equalizer. It doesn’t matter what we do, where we’re from or how much money we have, we all have the same amount of time. Effective time management is a must for those looking to get ahead. Whether your goal is to earn a lot of money over time or you just need to earn a little bit of extra cash quickly, properly managing your finite time is what makes it possible to succeed.
Everyday is a bank account and time is our currency, no one is rich no one is poor, we’ve got 24hrs each!
Raymond Mwangi is a Communications and Media Professional based in Nairobi.
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