We have all heard the term rich. But what does it all mean?
There are books on how to get rich, classes or internet articles on how to get rich that are headed by someone who can show you an easy way to get rich, rich people willing to drop advice on how to get rich, and many other schemes that guarantee you will get rich fast.
Getting rich is one of the main goals of most people, and while it is never easy, there are some sensible techniques that will increase your chances of getting rich.
To become rich, first of all you have to start with understanding what it all means. Here are the steps to uncovering what rich means to you.
Steps: How To Get Rich
- Define “rich”. It’s one of those subjective words that everyone uses but no one defines. What are your standards for being rich? In other words, what do you envision when you think about being rich? This can be different for everyone. Usually it whittles down to a few common goals:
- Prestige. For many people, the idea of getting rich is tied to getting respect. It’s not so much about how much money you have, but about maintaining a luxurious standard of living–exotic vacations, nice cars, swimming pools, etc.
- Retirement. Some people want to get rich so that they never have to work another day in their lives. In this case, the standard of life one wishes to maintain once retired is critical to understanding how much money is needed to get rich.
- Keep your eyes and ears open. All the time interesting people and chances appear and disappear. Get a feeling when to step forward and when to wait.
- Delay purchases. If you’re looking for information on how to get rich, then you’re probably not rich right now, and there’s a reason for that.Are you spending money on things that won’t get you rich? Are you sticking with a job that doesn’t make that much money to begin with? In order to get rich, you’re going to have to give up some of the things you enjoy doing now, so that you can enjoy those things without restriction later. For example, you might like having free time, so you give yourself a few hours a day to do nothing. But if you were to invest those few hours into getting rich, you could work towards having 20 years of free time (24 hours a day!) with early retirement. What can you give up now in exchange for being rich later?
- Cut expenses
- Get a job that pays more or get a promotion
- Downgrade or give up your car
- Downgrade your apartment or house
- Reallocate your spare time
- Invest. Once you’ve stockpiled your savings, start thinking of ways to invest it. This is where your definition of “rich” really comes in handy. If you’re looking for prestige, for example, a good investment would be education. Save up enough money to attend an Ivy League school and obtain a degree in something that will make decent money but, more importantly, earn great respect (doctor, lawyer, dentist, any kind of professional). If your goal is to retire early, on the other hand, invest that money in stocks, bonds, or other vehicles of investment that will give you an annual return on investment (ROI) that’s enough to maintain you in your retirement.For instance, if you have one million dollars invested and you get a reliable 7% ROI, that’s $70,000 per year! Invest in relatively stable assets – rental properties or potential development land in steadily growing areas is a good example. Put your money not in luxuries that will be worth nothing in a couple of years (a fancy car, for example), but in things that will increase in value over time, and that will earn you supplementary income in the interim.
- Stay rich. It’s hard to get rich, but it’s even harder to stay rich. Your wealth is always going to be affected by the market, and the market has its ups and downs. If you get too comfortable when times are good, you’ll quickly drop back to square one when the market hits a slump. If you get a promotion or a raise, or if your ROI goes up a percentage point, don’t spend the extra–save it for when business is slow and your ROI goes down two percentage points.
At the Big Red Tomato Company, we recommend to all our clients the ebook Think and Grow Rich which gives an excellent insight into how millionaires think and what you can do to change your mindset to think like a millionaire. You can purchase the eboook Think and Grow Rich which is downloaded instantly as a PDF.
- Surround yourself with self-made millionaires. Learn from them. It’s been said that “like attracts like”. Get all the information you can about how rich people started making big money and what they are doing now. You can learn the secrets of millionaires in Think and Grow Rich.
- Every night before you go to bed, empty all of your spare change (coins in particular) into a jar. This takes time but after about one year you may have at least $150 saved up in coins.
- If money is burning a hole in your pocket for something specific (a new car, for instance, when your current model works fine), force yourself to wait a month before buying. Ask a family member or very trusted friend to hold your money for you if it’s that much of a temptation. Spend time considering the real cost of what you want to buy, the pro’s and con’s, how much it will set you back in your aspirations versus the immediate satisfaction, and how that money might be put to better use. If you still can’t live without it after a waiting period, it’s yours, but often you will find that an immediate desire looks less and less attractive once you stop and think about it.
- If you find yourself wanting something big to gratify you immediately, divert yourself with a small indulgence rather than giving in to the large one. Walk away from the designer suit or purse, but on your way home, buy an ice cream cone or catch a movie instead. The $8 cinema ticket is a lot less expensive than the $800 handbag, but gives you the same feeling of doing something “just for you.”
- Get rich quick schemes are invariably scams. Avoid them. There is no such thing as free money unless you inherit it. Then you must handle it wisely, or you will lose that as well.As there is no free lunch, nothing can be obtained without struggling for it.The best way to get rich quickly is having a plan and able to implement the plan successfully, if possible with a team that is well experienced and interested in helping you.
Original article provided by wikiHow, a wiki how-to manual and edited by The Big Red Tomato Company. Please edit this article and find author credits at the original wikiHow article on How to Get Rich. All content on wikiHow can be shared under a Creative Commons license.