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Wealth: nearly everyone wants it, but few people actually know what they need to do in order to get it. Becoming rich takes a combination of luck, skill, and patience. To get rich, you'll need to set yourself on a path that leads to a monetarily enriching career, then handle the money you earn wisely by investing it, saving it, and reducing your living expenses. Getting rich isn't easy, but with a little bit of perseverance and skillful decision making, it's definitely possible.
Method 1 of 5:
1Put money in the stock market. Invest money in stocks, bonds, or other vehicles of investment that will give you an annual return on investment (ROI) great enough to sustain 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, less inflation.
- Don't get enticed by day traders who tell you it's easy to make a quick buck. Buying and selling dozens of stocks every day is essentially gambling. If you make some bad trades — which is unbelievably easy to do — you can lose a lot of money. It's not a good way to get rich.
- Instead, learn to invest for the long run. Choose good stocks with solid fundamentals and excellent leadership in industries that are primed for future growth. Then let your stock sit. Don't do anything with it. Let it weather the ups and downs. If you invest wisely, you should do very well over time.
2Save money for retirement. Keep saving. It seems that fewer people are saving adequately for retirement. Some feel they may never be able to retire. Take advantage of tax-deferred retirement plans such as IRAs and 401Ks. The tax treatment they embody will help you save faster for retirement.
- Don't put all your trust in Social Security. While it's a good bet that Social Security will continue to work for the next 20 or so years, some data suggest that if Congress doesn't radically alter the system — either by raising taxes or reducing benefits — Social Security won't be available in its current form. It is probable, however, that Congress will act to "fix" Social Security. In any event, Social Security was never designed to be the only resource for retirees in their later years. That makes it all the more important that you save and invest for the future.  X Research source
- Invest in a Roth IRA. A Roth IRA is a retirement account to which working individuals can contribute an annual sum of $5,500. That money is then invested and gathers compound interest. If you wait until retirement age to take money out of your Roth IRA, the money that you withdraw isn't taxed, because it was taxed at the time you first earned it.
- Contribute to a 401(k) account. This is an account set up by your employer where pre-taxed contributions can be invested. Your employer may choose to match all or part of your contributions. This is probably the closest thing you'll get to "free money" in your life! Contribute at least enough to take full advantage of the match.
3Invest in real estate. Relatively stable assets like rental properties, or potential development land in a steadily growing area is a good way to build wealth. As with any investment, there are no guarantees. Many people, however, have done quite well with real estate. Such investments are likely to appreciate in value over time. For example, some people think that an apartment in Manhattan is almost guaranteed to increase in value over any five-year period.
4Invest your time. 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? Investment advisor Dave Ramsey likes to tell his radio audience, "Live like no one else today so that you can live like no one else tomorrow."
5Avoid purchases that are likely to depreciate rapidly. Spending $50,000 on a car is sometimes considered a waste because it's likely that it won't be worth half that much in five years, regardless of how much work you put into it. As soon as you drive a new car off the lot, it depreciates about 20%-25% in value and continues to do so each year you own it.  X Research source That makes buying a car a very important financial decision.
6Don't spend money on stupid stuff. It's hard enough making a living. But it's hard and painful when the things you spend your hard-earned cash on are financial black holes. Reevaluate the things you spend money on. Try to figure out whether they are truly "worth it." Here are some things you probably don't want to spend that much money on if you plan on becoming rich:
- Casinos and lottery tickets. The lucky few make money. The rest of us lose it.
- Vices such as cigarettes. Heavy smokers can only watch their money go up in smoke.
- Huge markups like candy at the movie theatre or drinks at a club.
- Tanning booths and plastic surgery. You can get skin cancer for free outside if you'd like. And do nose jobs and botox injections ever look as good as promised? Learn how to age gracefully! You're not the only one getting older.
- First-class plane tickets. What are you getting for that extra $1,000? A hot towel and another 4 inches (10.2 cm) of leg room? Invest that money instead of throwing it away.
7Stay 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.Advertisement
Method 2 of 5:
Enriching Through a Career
1Excel academically. Whether it's a four-year college or vocational training, some successful people pursue further education beyond high school. In the early stages of a career, your employers have little by which to judge you besides your educational background. Higher grades usually lead to higher salaries.
2Choose the right profession. Look at salary surveys which indicate average annual incomes for specific professions. Your odds of getting rich are diminished if you pursue a career in teaching as opposed to a career in finance. Here are some of the highest paying jobs in America:
- Doctors and surgeons. Anesthesiologists make a whopping $200,000+ per year.  X Research source
- Petroleum engineers. Engineers who work with gas and oil companies can make a very good living. In most cases, they make upwards of $135,000 per year.  X Research source
- Attorneys. Lawyers top out at just above $130,000 per year, making this a lucrative field if you can put in the time.
- IT managers and software engineers. If you're good at programming and a whiz at computers, consider this very well-compensated field. IT managers regularly make $125,000 per year.  X Research source
3Choose the right location. Go where the good jobs are. If you want to pursue finance, for example, there are far greater opportunities in big cities than in rural, low-populated areas. If you want to build a startup, you'll probably want to consider going to Silicon Valley. If you want to make it big in the entertainment industry, go to LA or New York City.
4Get an entry-level job and work your way up. Play the numbers game. Apply to many places and subject yourself to lots of interviews. When you get your job, stick with it and get the experience you need to advance.
5Change jobs and employer. Once you've gotten some experience under your belt, consider finding a new job. By changing your environment, you can increase your pay and experience different corporate cultures. Don't be afraid to do this several times. If you're a valued employee, it's also likely your current company may offer you a raise or other benefits if they know you're looking at leaving.Advertisement
Method 3 of 5:
Reducing Living Expenses
1Try extreme couponing. It's one of the best feelings in the world when you can get paid to take home stuff you regularly use. If you do this right, you can actually get paid to coupon. At worst, you'll save a few extra bucks that you can tuck away for a rainy day. At best, you'll get tons of free stuff and will be richer in the process.
2Buy in bulk. It's not the easiest way to shop, but it's usually the most efficient. If you can borrow or buy into a membership to a bulk retailer like Costco, it can make real financial sense. In some cases, you can find brand-name products for sale at serious discounts.
- If you're hungry and you like chicken, buy four pre-cooked Chickens at Costco at the end of the day, when they go on sale. Sometimes they'll drop from $5 each to $2.50 each, meaning that you get at least ten hearty meals for about $1 each! Freeze any chickens that you don't eat immediately.
4Reduce your utility bills. Electricity, gas, and other utilities can deeply impact your monthly budget if you let them. So don't. Be smart about ways to keep your home cool during the summer and warm during winter. You may even consider investing in or building solar panels to channel the sun's natural energy into electricity. Keep your utilities low, and watch the money you save start to mount.
5Get a home energy audit. This will allow you to find out how many dollars are seeping out of your home in the form of lost energy.
- You can perform your own energy audit if you're the industrious type, but don't hesitate to hire a professional to complete the audit for you. It should cost anywhere from $300 to $500, which isn't cheap, but it could help you save much more than that over time (especially if you decide to re-insulate the home).
6Go hunting or foraging for food. You may need to invest in gear and permits, but if you already have these, this is an inexpensive way to get your own food. If you're ethically against the killing of animals, it's pretty easy to forage for food, depending on where you live. Just make sure to forage only for food whose origin and properties you are sure of. Getting sick or poisoned is never any fun.Advertisement
Method 4 of 5:
1Pay yourself first. This means before you go and blow your paycheck on a new pair of shoes or a golf club you don't need, put money aside in an account that you don't touch. Do this every time you get paid and watch your account grow.
2Make a budget (and stick to it). Create a monthly budget that covers all of your basic expenses and leaves a little bit of "fun" money aside. Sticking by your budget and saving at least some money each month is a good way to lay the groundwork for your efforts to get rich.
3Downgrade your car and house. Could you make do with an apartment instead of a house, or have roommates instead of your own place? Could you buy a used car instead of a new one and use it more sparingly? These are all ways to save a ton of money every month.
4Cut expenses. Look at the ways you frivolously spend money and rethink everything. For example, avoid going to Starbucks every morning. That $4 you spend on designer coffee every morning comes out to $28 per week, or $1,460 over the course of a year!
5Track down your expenses. To soar your efficiency on cutting your expenses, it is vital to keep track of them. Pick one of the numerous expense tracking applications there are around, like Money Lover or Mint, and record every single penny that goes in and out of your wallet. After 3 months or so, you should be able to know where most of your money go and what can you do for that.
6Spend your tax refund wisely. In 2007, the average American tax refund was $2,733. That's a lot of money! Can you use that money to pay off debts or create an emergency fund instead of blowing it on something that will lose half its value the second you buy it? If you invest nearly $3,000 wisely, it could be worth ten times that much in as many years.
7Break up with your credit card. Did you know that people who use credit cards for purchases end up spending more money than people who use cash? That's because parting with cash is painful. Using a credit card doesn't carry that much of a sting. If you can, divorce your credit card and see how it feels to pay with cash. You'll probably end up saving a boatload of money.
- If you do maintain a credit card, do things to reduce expenses. Try to pay off the full balance each month and on time. That results in interest-free credit. At the very least, make the monthly minimum payment before the due date to avoid a late fee.
Method 5 of 5:
Going Mortgage Free
1Refinance your home mortgage. Refinance to a lower rate or to a 15-year loan instead of a 30-year loan. This way you only pay a few extra hundred dollars per month but you will save yourself much more than that in total interest.
- For example, a $200,000 mortgage on a 30-year loan will cost you another $186,500 in interest payments, so you are actually paying a total of $386,500 over the course of 30 years. On the other hand, if you are willing to pay a few extra hundred dollars a month (for example, $350) by refinancing to a 15-year loan (usually at a lower interest rate), you could pay your mortgage off in only 15 years, and the best part is you would save yourself a whopping $123,700 in interest. That's money in your pocket. Talk to a loan officer about your options.
QuestionI'm dumb and I get bad grades, can I still get rich?Community AnswerYou may be dumb in one field but you can be great in another. A fish always feels dumber watching a monkey climb a tree so easily and knowing that it could not climb. Find a field where you can be good. Everybody is good at something. Bad grades do not necessarily mean that you cannot get rich. Getting rich requires financial and economic knowledge, it doesn't necessarily matter how or what you have studied.
QuestionHow do I stop spending?Community AnswerCreate a budget and stick to it religiously. Before you go out shopping, calculate exactly how much cash you need and leave the rest behind. Leave the plastic behind too — studies show that people spend significantly more when they are carrying a credit card.
QuestionCan I get rich by just savingCommunity AnswerIt's not likely, but saving is a good start. You need to figure out a way to make a LOT of money. Then, in addition to saving, you'll likely need to invest.
QuestionI'm a teenager working part-time at a grocery store. Should I have no other prior commitments, is going full-time is a good idea?Top AnswererIf you're a good worker, full-time employment is an excellent first step in accumulating money. Getting a good education is also very important, and you may have to work part-time in the early years. Some entrepreneurs, however, have done well without much formal education.
QuestionHow do I regain confidence after having been fired from my job?Top AnswererRemind yourself that there have been some very successful people who lost a job at some point in their lives. What matters is not how many times you've fallen (or been knocked) down, but whether or not you get back up again and learn from those experiences.
QuestionHow can I make money as a student?Community AnswerMost colleges and universities offer work-study programs for students with financial need. You can also get paid to take notes in classes you're already taking, join research trials, or assist professors with research.
QuestionIf I want to earn and enjoy life at the same time, how do I manage money?Community AnswerPut away at least 10% of your income into savings or investments. For some other tips, check out this article: how to manage your money wisely.
QuestionHow do I get rich at nine?Community AnswerNine is a difficult age to get rich, but you can start laying the foundation by working odd jobs for family and friends and saving money.
QuestionIs there a way I can get rich making money on the internet?Community AnswerIf you have the necessary skills, there are websites on the internet where you can find freelance work that you can do from home. This work usually requires a skill set like writing, editing, computer programming, data entry, etc. There are also surveys you can do for money, but tread with caution. Some surveys are scams and you can end up losing money if they gain access to your bank account. Check for trustworthy surveys.
QuestionIs using a credit card not good for getting rich?Community AnswerCredit cards are not bad in and of themselves. It is usually the irresponsible overuse of them that causes financial havoc. Having a credit card around for the times that they are absolutely needed can be a good idea, but using it too often can put you in heavy debt. Be careful with credit cards, but don't be afraid of them.
- Buy only what you need, not what you want. Make careful choices.
- Write down all of the things you buy and all the prices, and see where your money is going. Often when people do this, they are amazed to learn exactly how they spend their money.
- Having more than one income in the family will help secure your financial status better than having just one.
- Sometimes you have to spend money to make money.
- Look for every opportunity to make money. Sell items you don't use anymore, no matter how small.
- Every night before you go to bed, empty all of your spare change (coins in particular) into a jar. After a year or so, you may have at least $150 saved up in coins. Periodically deposit this money into savings.
- Try to cook at home and do the daily chores yourself. Avoiding professional services such as laundry and domestic help can save you lots of money.
- Borrowing money is acceptable when it's going to be used for acquiring income-producing assets.
- If you're a business owner, keep your personal expenses as low as possible and re-invest in your company until you are financially independent. In the meantime, contribute to an emergency fund amounting to about six month's worth of living expenses. Put this sum in a savings account, a money-market account or a very-short-term CD.
- Keep your credit record clean. Having a low credit score will make it hard to qualify for loans or a line of credit.
- If money is burning a hole in your pocket for something specific (a new car, 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 pros and cons, how much it will set you back in your aspirations versus the immediate satisfaction, and how that money might be put to better use.
- Surround yourself with self-made millionaires. Get all the information you can about how rich people started making big money and what they are doing to maintain their wealth.
- Research sufficiently on any business ideas you are attracted to before starting.
- There is no such thing as free money unless you inherit it, and even then, you must handle it wisely or you will lose that as well. The other exception is the employer match for your IRA or 401K, as mentioned above.
- Resist the temptation to buy expensive merchandise. Cheaper items can be high quality, and keeping tight control on your wallet will always pay off in the long run.
- If you frequent bars and clubs, skip the trip once in a while. Go one week, skip the next two.
- Pay off your highest-interest bill first and then focus payments on the next highest-interest bill until you are completely out of debt. This plan will cost you the least in interest. An alternative method is to pay off the smallest loans first. This allows you to see progress being made by quickly eliminating some of your bills.
- If you find yourself wanting something expensive in the quest for immediate gratification, divert yourself with a small indulgence rather than giving in to the large one. Walk away from the designer suit or purse, but buy an ice cream cone or catch a movie instead. The $8 movie ticket is a lot less expensive than the $800 purse but may give you the same feeling of doing something "just for you."
- If you want to get rich very fast, you will most certainly have to take risks. A much better approach is to accumulate wealth in a slower, safer manner.
- Do clothes shopping in the fall or spring when there are often more good sales.
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- ↑ http://www.marketwatch.com/story/will-social-security-be-there-for-you-2013-07-09
- ↑ http://www.carsdirect.com/used-car-prices/why-does-a-new-car-lose-value-after-its-driven-off-the-lot
- ↑ http://www.askmen.com/money/career_150/177c_career.html
- ↑ http://www.askmen.com/money/career_150/177c_career.html
- ↑ http://www.askmen.com/money/career_150/177c_career.html
About This Article
There is not one guaranteed way to become rich. For most people, the best path to building wealth relies on a combination of expanding your earning potential, spending wisely, avoiding debt, saving money, and investing carefully. Becoming wealthy starts by earning good money. You can do this in many ways: going to school, getting higher education and joining a high-paying profession; working your way up in a professional trade; or launching a successful small business; among other things. Avoid debt whenever possible, especially credit card debt, which carries a high interest rate. If you do have credit card or other high-interest debt, pay that down as soon as you can. As you build your income, focus on saving money by living within your means, spending your money carefully, and saving as much as you can. Put a portion of your income into your savings and investments before spending it on other things. A 401k, IRA, or other tax advantaged investment plans are also a good way to earn long term wealth, especially if your employer offers matching contributions. Make the most of your investments by investing in broad-based low-fee funds, like S&P 500 index funds, or targeted retirement funds that invest in a broad portfolio and adjust the balance of stocks and bonds over time to maximize returns when you are young and protect your assets as you get older. While there’s no guarantee that any path will make you wealthy, by following these steps, you’ll be in the best a good position to get rich and gain financial independence. For more tips, including how to get rich by reducing your living expenses, read on!