03 Basic steps to build wealth – Secret of getting rich

20/01/2021 Kathirnathan Ragulan

This is not a get rich quick scheme or an article to deal with impossible task, you can get rich by following three simple steps, wealth accumulation is not rocket science, it is a process of following a few simple disciplines, you heard me right, simplicity is the key to build wealth, there are three types of rich people, inherited wealth, lucky break through and systematic hard work, we are not going to deal with the first two and we are interested to deal with the later which is the reason for more than 90% of the rich & wealthy people.

The three basic steps to build wealth is very simple process and systematic execution, anyone who can practice it can be wealthy and rich. the simple long lasting habits are the key to success.

Step One – Earn

Find a way to earn money, don’t look for shortcuts and you have to plan carefully and your earnings should be little more than your monthly expenses, it can be your employment or a side gig or a fully-fledged business, you need to make money in order to build wealth, focusing on your career or profession will give good chances to make money, plan your career and start doing it seriously to make money.

Step Two – Save

the second step is to save money, earning is easy for most of us and now comes the difficult part, no matter your profession, education level or the income level, you should commit to saving a minimum of 20% of your income, if you earn and spend everything, you will have nothing to build on and you cannot build wealth, you must practice a systematic financial discipline to control your spending below 80% of your income, Committing to saving your income is part of setting financial goals. It’s at the heart of building any wealth.

Step Three – Invest

Saving and investing are two different financial perspective, saving will give you liquidity, investing will grow your savings, the earlier you start investing will favor your early retirement, use a simple investing strategy, try known things such as flipping houses, vehicles or stocks, use your savings to purchase it, hold and sell to maximize return, find some more safer investment options and be careful when selecting and specially when partnering with existing businesses. Alternatively, you can use compound interest giving investments such as fixed deposits and secured mutual funds if you are not willing to take a risk.

Conclusion

The three steps are very basic and require little sacrifice, discipline and consistency, and if you can maintain a positive gap between your earnings and savings, and if you can maintain consistency in maintaining the gap, and if you can convert those savings to an investment, you will become rich over time and you can retire early. the three steps mentioned above are not magic or shortcut, it is systematic approach and practiced by the billionaire investor warren buffet.