March 02, 2020 6 things you can do right now to boost your wealth
It’s easy to put stuff off in life. That might be joining the gym so you can start getting fit, for instance. It might be saving for that next holiday.
And that’s no criticism. I’m guilty of it. In saying that, I’m definitely getting better at taking action on stuff now rather than later. Maybe it comes with age.
Stuff like exercising and getting fit, for example, takes time. You don’t rock up to the gym, work out once and, bingo, all of a sudden you’re as fit as an elite athlete. The same goes for building your wealth. It takes time – and patience.
Wealth management is the same. Interestingly, how to build wealth isn’t just about making more money. More often than not, it’s about using the money you do have to your advantage and, as cliched as it sounds, making it work harder and smarter for you.
Which is what I want to talk about this week – growing your wealth (I’m not just talking about how to save money) and what you can do right now to get cracking.
Figure out your baseline
The first and most important thing you need to do is work out what your net worth is, and you need to be really honest about it. Oh, and make sure you write it down.
The reason why is that, while most people may have a rough approximation in their mind, seeing your current net worth on paper makes it real.
In fact, it can actually be a really eye-opening experience. There are plenty of ‘net worth’ calculators floating about on the Internet, so I won’t get too forensic as to what you’ll need to do.
Interrogate your cashflow
As with establishing your net worth, I need you to be absolutely transparent and ruthless with yourself on this one.
It’s easy to brush over aspects of your spending.
Print out your bank account and credit card statements – yes, fire up your printer – from the past six months and grab yourself two different coloured highlighters.
Use one to highlight necessary, non-negotiable spending and the other to highlight spending categories that you could live without and, at a push, curb altogether.
Get yourself on autopilot
Once you’ve got your baseline and have complete visibility over your spending, the next trick is to automate as much of your finances as you can – a simple budget planner or budget template can really help with this, by the way.
That might be setting up direct debits, automatic payments and the like, and transferring a set percentage of your salary at regular intervals to save (see below) without you having to think about it moving forward.
The idea is that automation means you forget about it, then it all starts to accumulate.
Start saving a percentage of your income
I’d argue people who routinely save a set percentage of their income each week (or month) out there are a minority.
And I don’t say that sitting in my model-saver ivory tower – we see it all the time.
Obviously, the greater your income, the more you can regularly save.
For me, 10 to 25 percent is a good guide, even if that means making a few sacrifices to up the percentage, which you’ll have already identified when you interrogate your cashflow.
Regardless, even if it’s a smaller percentage, the point is to lock down a percentage of your income to save – and stick to it!
Don’t buy crap
Now for the real elephant in the room. Don’t buy crap. In our overtly consumer-driven world, we end up buying so much crap that we don’t actually need.
Do you really need that latest gizmo or large-screen television? I’ll give you a tip.
Next time you go to splurge on something ask yourself this: “do I really need this… and can I live without it?” And be really honest with yourself.
You’ll be surprised just how often your answers are “yes” and “no”, respectively.
Get into property
This one will ultimately depend on if you have capital up your sleeve or not.
Investing in real estate won’t supercharge your wealth in the short term, but it can gain you some serious ground over the medium to long term.
Whether it’s buying an investment property – or rent-vesting – or buying your family’s dream home, it’s all about time and the right advice.
Done right, the property’s a fantastic way of getting ahead.
I’ve covered a bit of ground here, so, as always, if you need to soundboard your current situation or dig a little deeper around what I’ve shared, feel free to drop some time for a coffee in my diary below.
Disclaimer: All information contained within this article is of a general nature. It does not take into consideration your personal financial circumstances. Please consult a professional financial adviser (just like us ) when making a financial decision.