Not everyone is going to be a millionaire in life, but building wealth is as simple as saving money as you go throughout life. You do not have to have a high income in order to accumulate wealth during your lifetime, but you do need to have discipline and determination. Today, let's look at my top 5 proven wealth building strategies.
1) Pay Yourself First
The biggest mistake that most people make in America, is that they pay their bills and then play with the rest of their money until they get paid again. In order to accumulate wealth, you must learn to pay yourself first. If your employer has a 401(k) plan, enroll in the plan, and maximize your contribution to match their contribution. Because this money comes out of your paycheck before you see it, you will not have the ability to spend it after you get paid.
2) Save Now
The earlier you can start saving a life, the more wealth you will accumulate later on in your life. If you aren't able to save money until after your children leave the house, you are going to fall significantly behind those that started saving prior to having children.
3) Get Rid Of Bad Debt Immediately
Before you can begin to build up your savings, it is important that you get rid of any bad debts first. The best return you can make on your financial future is to pay off any credit card and auto loans immediately.
4) Have An Emergency Fund In Place
Nothing will wreck your best laid plans faster than an emergency situation. Make sure you set aside 3 to 6 months worth of expenses to live on just in case a financial catastrophe should strike your house. Without an emergency fund in place you will be forced to take on debt, or even worse, cash in your retirement accounts. In order to survive hard times, you must have an emergency fund in place at all times.
5) Always Protect Your Assets
Make sure that you are always properly insured while going through life. You should always have good health insurance, dental insurance, home owner insurance, car insurance, long-term disability insurance, and a proper life insurance policy. Having these policies in place, will not only protect your assets, but it will make sure that you can recover from any financial catastrophe.