5 Things I’m Doing to Build Wealth Today

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This is a guest post written by Liz Crest from BudgetingForMore.com. After you’re done with this article (and Like and Tweet it of course), I encourage you to head over to her site and have a look around. She’s got some great stuff there!

It only took a year of working a full-time job after graduating from college to realize that I didn’t want to work forever.  It felt great to earn money, but the daily grind is exhausting.  I wanted freedom and started to really think about retirement.  As a result, I became much more interested in personal finance. I started researching retirement, investing, saving and budgeting. I read any personal finance books I could get my hands on.

5 Things I’m Doing to Build Wealth Today

I realized that if I ever wanted to retire or even just work part time, I needed to build some serious wealth. After some searching, I discovered that the formula to build wealth is actually very simple: keep your expenses low and increase your income. Then save and invest as much of your income as you reasonably can.  Building wealth is not something you can do overnight. Wealth is the result of years of consistent, hard work.  While it may sound like a lot of blood sweat and tears, don’t get overwhelmed by the idea of building wealth. Here are five things you can do to build wealth today.

1) Invest in personal financial software

If you want to build wealth, you will need to manage your finances very carefully. We use a budget every single month and track our investments and debt closely. While you can find many free budget templates online, I recommend using software. We use Quicken and I love it.

Editor’s note: I (Derek) use Mint.com and Personal Capital. Both are free and will keep your information secure. If you’re interested only in budgeting, use Mint. If you want to keep track of your investments and get an in-depth look by linking up your retirement accounts, use Personal Capital.

build wealth

Why software? It’s extremely efficient. Instead of manually entering all your expenses into a spreadsheet, you sync all of your bank accounts to the software and download your transactions. Not only will you save yourself a lot of time, but personal finance software will provide you with so much more information. You can build multiple budgets, track your net worth, forecast your debt repayment schedule and track your investments.  It’s well worth the money.

2) Cancel your cable plan. Today.

Part of building wealth is making sure you keep your expenses low. Any money you can save today can be invested and help you build wealth. We have spent the last few years carefully examining our budget and identifying where we can save money. Cutting the cable television package is a great place to start. Cable was easily costing us an extra $30-40 a month. Over the last two years, we’ve saved at least $700, if not more from canceling the cable.  That’s no small chump of change. All that extra income goes towards retirement. What other expenses can you lower? How about auto insurance? Get on the online or on the phone and see what you can do! If you want to build wealth, you’ll do it now.

3) Make more money

Increasing your income will also help you build wealth. Making extra money can be more challenging than cutting expenses. However, there is no limit to how much extra income you can earn. Can you pick up an extra shift at work? How about take on a weekend job? If you’re creative and up for a big challenge, consider starting a blog or becoming a freelance writer. Any extra income earned at my house goes towards paying off our student loans. The sooner we pay off our loans, the more we can save for retirement.

build wealth4) Take care of yourself

I can’t wait for the day that I can retire or even just work less. It will take several more years for me to build up that kind of wealth, but when I reach that point I want to enjoy it as much as possible.  I don’t want to be sick and unable to enjoy the freedom that I have worked so hard to achieve. I take care of myself so that I can have a healthy future.  Taking care of yourself is simple: cut the bad habits like smoking and excessive drinking. Get some exercise and eat nutritious food. Your health is truly a priceless treasure.

5) Adopt a mentality of abundance

I’d be lying if I said we haven’t made some sacrifices to help us reach our goal of retirement. We live in a modest home. We don’t buy fancy clothes or go on many vacations. We don’t eat out often and buy used whenever possible.

I’m sure to some this style of living does not sound all that fun. In fact, it might sound like we deprive ourselves. However, living like this has helped us adopt a mentality of abundance. While we don’t have the nicest and newest stuff, we have plenty. We keep our expenses low so that we can invest our money to build wealth. We put a lot of money towards retirement and towards paying off our student loans. Our lifestyle is very different from many of my friends but I’m proud of it. We live a more gratifying life because we are working towards a goal of building wealth.

What are you doing to build wealth?

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Money

Derek

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

12 Comments

    • There’s no better time to start building wealth than now. Little changes (like cutting your cable) can make a big difference in your future.
      Liz recently posted..Small Business Updates

    • Quicken is an incredible tool. I fear that they don’t market their products towards millennials and this group is missing out on an incredibly powerful tool.
      Liz recently posted..Small Business Updates

    • I won’t lie, it was a hard cord to cut. But once you adjust, there’s no going back. You will be saving yourself a lot of money and you’ll feel great about that.
      Liz recently posted..Small Business Updates

  1. Great tips. I think living along the way is important too. Who wants to wait to be happy with their life. Acknowledging our abundance I think is key to appreciating and enjoying our life now.
    Emily @ Simple Cheap Mom recently posted..Why Do You Want a Budget?

  2. Great point Emily. I think anyone trying to build wealth needs to understand what actually adds value to their life. Do you need to buy material possessions to be happy? Or are there other aspects to wealth such as family, friends and experiences. You don’t necessarily need to have money to enjoy these things today.
    Liz recently posted..Small Business Updates

  3. I am reading a lot. I think that by reading and constantly learning, I am growing and finding better ways to do things. This in turn can (and often does) lead to more money.

    The easiest example of this is just being more productive with my time. I am more organized and this helps me to get more done every day.
    Jon @ Money Smart Guides recently posted..Automating Your Savings Just Got Easier Than Ever

  4. Excellent point. Knowledge is powerful and there is always something to learn. My finances have changed since I started reading personal finance blogs over the last three years. I’ve learned a lot about credit cards, investing and even about retirement. This knowledge definitely helps me build wealth.

  5. Please add – be disciplined and avoid debts.
    Live a simpler life as much as you can and plan your retirement as early as now.
    Building your wealth today means including your wealth in the future. You don’t want to be wealthy today and be poor during your golden years. That is why I suggest that you will also plan your retirement, because during those times, the possibility that you will experience financial setbacks due to health costs or long term care cost are high. Think about as early as now.

    • Great points Glenn! By deferring just a little bit of money today, poor living can certainly be avoided in the distant future!


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