1. Have a separate savings account that automatically deducts money from your checking account, so you automatically pay yourself at least 10% first. According to one survey, successful retirees saved 6% to 20% annually and invested it, which eventually resulted in a comfortable income in retirement. Take the 10% and create an emergency fund with a few thousand dollars. Once you have that, then take the money and invest it.
2. Contribute to your 401(k) or an IRA as soon as possible. The money will grow without tax and your employer may match your 401(k) contributions giving you free money! Start when you’re young or now!
3. Make your car a mobile learning vehicle or use “mindless” time to learn. Listen to financial podcasts while you’re driving, working out, walking, folding laundry, or getting ready in the morning. The “Be Wealthy & Smart” podcast is here or listen on iTunes. For Android, click here.
4. Be sure to check for coupon “promo” codes before you buy online. One of the best places to check first is RetailMeNot.com. Also, check Amazon.com for cheaper prices on electronics, etc. before buying elsewhere.
5. Avoid a strategy of being too frugal and missing out on life. Instead consider adding an extra stream of passive income by starting a business online. Learn to how to start a profitable blog here.
6. Don’t change your personal residence very often. When buying a home, think ahead 20 years to what your needs will be and determine a location and home that will continue to suit your needs for the long term. Paying real estate commission to buy and to sell you home, (in addition to moving expenses), may result in thousands or even hundreds of thousands of dollars permanently disappearing from your net worth. Move rarely. It’s better to stay in the same home and invest the real estate commissions saved to remodel your residence (which also provides you home equity), than to move frequently and have the money gone. Listen to my personal story about deciding whether to move or remodel and how I calculated which was the best decision.
7. Buy a car that will last 300,000 miles or more (there are 10 that have been documented in my podcasts). Buy them a few years old, in pristine condition, and keep them as long as possible.
8. Shop carefully for expensive designer goods or high ticket items and buy on sale. If you really want them, buy the occasional designer shoes, handbags, and clothes at outlet malls at deeply discounted prices.
9. Use “opportunity cost” to make spending decisions. Be conscious that big ticket items you purchase mean that is money you won’t be able to invest and build wealth. Every $10,000 you spend that could have been invested at 10% for 30 years, would have grown to $174,000. Ask yourself, do I really need this? How badly do I want this? Would my life be better off if I invested the money instead?
10. Don’t get divorced. One of the biggest detractors from the Forbes 400 wealthiest people was paying their spouse half of their net worth. Either get a pre-nuptial agreement to protect your assets or stay married!
Bonus Tip:
Building wealth can be made easier if you have good credit. Get your free credit report here. You are entitled to one free credit report per year. Notice what your credit score is and check to see if there are any errors on your report. It’s possible that other peoples’ credit troubles get attached to your name. Listen here to find out what to do to improve your credit or correct mistakes.
Want to quicken your path to financially freedom?
Listen to the award winning “Be Wealthy & Smart” podcast or read my Wealth Heiress book.
c 2018 Linda P. Jones
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Thanks for the financial tips for financial wealth
And your book is required reading for financial savvy readers
Thank you, Chris! Would love to have an Amazon book review from you, if you’re so inclined. 🙂
Love your suggestion on buying designer items discounted (or at least thoughtfully). I bought a gorgeous leather wallet for $17 in Buenos Aires in 2007; after many many years it was finally falling apart and I decided to try to replace it with something equally as high quality. And since I make a lot more than I did in 2007, could justify a bigger splurge. 😉 I happened to have long layovers in Munich to/from a trip to Georgia (the country) in September and found a beautiful leather wallet at a high end Italian luxury store for sale at the airport. I researched the price of the wallet in the US and realized that between the strong US dollar, the price in Euros, getting back an additional 10% from the VAT, and not paying San Francisco sales tax, I’d be saving at least $150. (Also the sales guy said it would last at least twenty years given how good the quality of the leather is.) I would like to recommend smart & researched airport shopping as another way to potentially buy designer items if you have the time and opportunity at an airport to do it (and the exchange rate is good). Also I decided that my money needs a good “home” that gives it the respect and appreciation it deserves — I have taken to calling my new wallet my “money castle”!
Good for you, Jenne! It is all about spending priorities and spending wisely. Nice job getting a good deal and stretching your dollars. 🙂
Great quick tips. I especially like both not being too frugal, but using apps like Retail Me Not to stretch your money so you get more out of it! My favorite quick tip is to check your tax withholdings to be sure you aren’t overpaying. It may be a quick way to increase your paycheck to reduce debt or increase savings. The fastest way most of us can make our money work better for us!
Thank you, Allyson, I’m glad you liked the tips! Appreciate your comments very much. )