I certainly don’t consider myself a “wealthy” person monetarily (I am “wealthy” in lots of other ways, but that’s not what I’m talking about in this particular post), but over the past few years as I’ve worked my way out of debt and started saving for my future. Along my journey, I have discovered a few things that have worked particularly well for me and I thought they might be helpful for others, so without further ado…
5 Tips for Planting the Seeds of Wealth
- Ditch the Debt. Nobody gets wealthy while they’re still making monthly credit card payments. Ditto for car payments, student loan debt, and basically any other debt that you can think of. Not only does it feel good to get the, “debt monkey” off your back, it’s also the only way you’re going to be able to build wealth. If you’re giving all of your money to the student loan companies each month (I know this scenario all too well!) you’re not making the best use of your best wealth-building tool, your salary!
- Only invest in things that go up in value. Cars, trucks and RVs go down in value. Born and raised in Maine, I understand that some people have a great love and appreciation for motorized “toys”, like snowmobiles, four wheelers, boats, jet skis etc. But toys that make you broke are foolish. Yes, I know that the payment is “only” $300 a month, but that’s $300 a month you could be saving towards an emergency fund or your retirement.
- Delay instant gratification. Some people are naturally good at delaying gratification because they can see the longer-term gain associated with waiting to get what they want. For other people, this tip is really difficult. I have to admit I’m not always a naturally patient person. I once played Verruca Salt in my middle school’s production of Charlie and the Chocolate Factory, I want what I want, and I want it now! Over the years I’ve learned that patience really is a virtue. It might not be the most fun to wait to buy things you want, but when you can see the “bigger picture” you realize that having that designer purse, or buying that new car isn’t really worth blowing the budget now.
- Start saving for retirement… yesterday. Nobody wants to be broke, eating cold Alpo out of the can in their retirement years. When you’re young and carefree it’s hard to think about 50 years down the road. I didn’t start saving for retirement until I was almost 30, and that was definitely a big mistake. The earlier you start the more compound interest is working in your favor (i.e. the less money you have to put in). Start later and you’ll likely have to “catch up”, which means dropping a larger percentage of your salary into retirement savings each month (likely at a time when you have a family or other obligations to take care of).
Practice contentment. I bet that Warren Buffet isn’t sitting in his living room feeling bad for himself because he doesn’t have the biggest and best flat screen in the neighborhood (although he certainly could if he wanted to). He’s happy with the things that he has and he doesn’t have to show off to other people to let them know how well he’s doing. Why do you really want those $400 shoes? Do you have a $50 pair in you closet that serve the same purpose? Practicing mindfulness and being thankful for what I have has really curbed my spending and my desire to have the “latest and greatest” gadgets and gifts.
How are you, “planting the seeds” to build wealth?
Image: Tax Credits.net