You don’t need to wait until you retire to enjoy financial freedom. Start building wealth in 2022 by learning how to save money and invest wisely. But what is wealth building, and how can we do it? Here are simple but top wealth building strategies.
What is wealth building?
Wealth building is a term used to describe a strategy or plan that helps you achieve financial independence. The problem is it takes time to build wealth. If you want to start now, you should focus on saving money instead of spending it.
Yes, wealth building is a long term strategy and, in reality, a not-so-simple endeavour. However, if we look at wealth building, we can condense it into three steps:
- Making Money (Looking into multiple streams of income: earned and passive income)
- Saving Money (Earning is not enough to build wealth, so you have to look into ways to keep your cash flowing and to decrease your costs to save up)
- Investing Money (Now, you have some money saved up that you can invest. Investing is one way to start building long term wealth. But knowing where to put your money to get the best return can be challenging. Some options are the stock market, mutual funds, and real estate investments. )
Why is wealth building important?
Wealth building is the act of accumulating assets or property over time. Wealth building is essential for three reasons.
- First, it allows you to accumulate resources and become financially independent.
- Second, it gives you freedom from financial worries.
- Third, it helps you build generational wealth.
What Is Generational Wealth?
Generational wealth is a combination of financial and non-financial assets (such as land and rental property) accumulated over time. This type of wealth is passed down through generations. The first step towards building generational wealth is understanding where your money comes from to make smart investment decisions. To build generational wealth, you need to invest wisely and consistently.
Why You Need Wealth Building Strategies
A wealth building strategy is a plan to build wealth over time. Wealth building strategies are not a get-rich-quick scheme. You cannot just go out and buy a house and expect to make money off of it. There are many ways to create wealth, but the best way to do it is to have a long-term plan. If you want to start investing today, you should set aside time to think about what you want to achieve. What do you want to accomplish? Do you want to retire early? These are necessary questions when strategizing how to build great wealth.
Building Wealth in 2022
Want to start building wealth in 2022? Try these simple wealth building strategies.
Prioritize Paying Off High-Interest Debt
When you carry high-interest debt from a credit card or a personal loan, the more you will end up paying in interest over the life of the loan. This is especially true for forms of revolving credit, such as credit cards, where you will make monthly payments indefinitely until the balance is repaid. While this may not seem like much, you will have spent thousands and thousands of dollars on repaying interest over many years.
Avoid Lifestyle Inflation At All Costs
Lifestyle Inflation refers to the situation where a person’s spending increases as their income increases making it nearly impossible to become financially independent but creating a cycle of living paycheck to paycheck. As you can imagine, it’s difficult for people to grow their wealth if they cannot spare enough income to save and invest without jeopardizing their living situation.
We often see this with celebrities and athletes who make it big, buy the biggest house and the fastest cars, designer everything, and live like royalty for a few years. But, once that money is gone, they are left with very little savings in their bank accounts and investments to fall back on.
Audit Your Recurring Monthly Expenses
Nowadays, just about everyone pays for a monthly subscription service, whether it is a streaming service like Netflix, Apple Music, or Hulu or a utility like a phone bill and internet. People often forget they even pay for service despite not using it because those small automatic payments can quickly go unnoticed.
Think this is too insignificant to make a difference? Ask AOL how much revenue they bring in with the subscriptions that users forgot to cancel.
Sit down once a month, review your monthly account activity and cancel any services you do not use enough to justify the expense. You may be surprised at what a difference this can make.
It would be best if you tried to negotiate a better rate for recurring utility services such as phone, cable, and internet. Some companies will offer you better pricing to retain you as a client. Alternatively, their competitors may be offering deals if you sign up with them instead.
This extra cash can help you cut back on wasted expenses and get the ball rolling for your savings account or investment portfolio.
Wealth Building Strategies: Hire a Team of Wealth Strategists
When it comes to making sound investments, hiring a certified financial planner and knowledgeable and proven wealth strategy professional to help you make the most informed decision on your finances is as the sound of an investment as there is.
Pro Vision Wealth works with you to make the best financial decisions based on your financial goals, whether taking full advantage of your deductions come tax season or helping you find the best long-term investments. We can help you create a financial plan that will set you up for success.
Contact Pro Vision Wealth today to get started.