🌼4 Rules to Live By if You Want to Get Rich(HIGHLY RECOMMENDED)
While you likely know how to earn a living, and maybe even a comfortable living, what you might not know is how to build wealth.
That’s because making money and acquiring wealth are two different things.
For example, you could be making $100,000 a year and still be living paycheck to paycheck, because you spend everything you make. Therefore, your net worth could be zero or even negative.
On the other hand, someone earning $50,000 a year, who saves 20% of their pay, could be on their way to retiring a millionaire someday.
The point is that building long-term wealth requires following a strict set of rules when it comes to getting rich. Luckily, the rules are fairly simple. The hard part is following them.
1. Don’t use your money to ‘buy friends’ or impress others
If you are serious about creating lasting wealth for yourself and your heirs, then you can’t afford to use your money to buy things you want just to gain or impress friends.
While it might feel fun to be the life of the party, if every party is thrown on your dime, then entertaining and impressing friends is going to get expensive real fast. And when your money is all gone, chances are, most of your (fair-weather) friends will be, too.
Instead of using your money to impress others, use it to work for you by saving and investing as much of it as possible.
2. Don’t make an expensive purchase without first shopping around for the best price
Someone once told me that before they buy anything higher than $100, they make sure that they are getting the absolute best deal possible. That’s also called comparison shopping — comparing prices before buying.
And shopping around for the lowest price can really pay off, especially if you put the money you save toward your savings and investing goals.
3. Never buy anything you can rent or lease
We often hear people refer to home ownership as the American dream. However, the cost and upkeep of owning a home means you have less money to save and invest to build long-term wealth.
In many housing markets, it’s still cheaper to rent than to own a home. That’s why, I prefer renting.
And the same goes for cars. Never buy a new car. It’s one of the worst investments you can make, because as soon as you drive it off the lot, it drops in value by thousands of dollars. Leasing makes your financial sense than buying. But if you absolutely want to own a car, at least buy a used vehicle.
Read also: How to be consistently productive
4. Live like a broke college student
Seriously. Whenever I listen to advice from most self-made millionaires, especially those who managed to retire millionaires in their 30s or 40s, they all describe living as frugally as possible. Like a broke college student.
If you haven’t caught on by now, acquiring wealth requires you to save and invest as much money as possible. Therefore, living frugally naturally means you will have more money to save and invest for your long-term financial goals.
In short, if you want to get rich, then you need to focus on using your hard-earned money to create wealth, not buying or impressing friends with your money. That also means you need to carefully scrutinize every dollar you spend, especially on major purchases. Oftentimes, you can save money by renting or leasing, as opposed to owning. Above all, you need to live as frugally as possible in order to devote the most amount of resources to your wealth-creation goals.
CONTRIBUTED BY Evan Crosby
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