You may not get out of your debt situation overnight, but take some positive action to improve your financial situation and you can accumulate some wealth.
Here is a look at some of the healthy money habits and tactics employed by the wealthy. From living below your means to buying the right kind of assets, there are plenty of ways to improve your wealth level.
It’s not rocket science
There is a reason why the rich get richer. Don’t bemoan their good fortune or wonder how they accumulated such wealth. Instead, focus your attention on copying some of their tactics.
A fundamental reason why wealthy people don’t stress about making all their monthly payments is because they live below their means.
You could argue it would be difficult to skip a payment when you have millions in the bank. But it is not how much you have that matters as much as how much you have to pay out regularly.
The math works whatever numbers you put in. Say you have an income of $50,000 a year, if you spend less than that you will be living below your means and accumulate wealth. The basic starting point to reducing your debt and growing richer is working out how to keep your expenses below the amount you earn each year.
Add up your credit card debts and monthly payments plus everything else like rent. If you are living beyond your means, take action to turn that situation around.
Avoid depreciating assets
Another classic feature of wealthy people is their love of properties. This is fueled by the sound investment strategy of buying assets not liabilities.
Buying property is about getting your money to work for you rather than the other way around. Anyone with a true understanding of wealth knows that every spare dollar you spend needs to be on assets that can appreciate in value.
When you buy a new car the value immediately drops the moment you drive away from the showroom. It keeps on dropping as you use it and as time goes by. Eventually, you sell it for a lot less than you paid for it. This is a depreciating asset.
Investing in real estate doesn’t always guarantee a profit and capital growth. But there is a much greater chance it will be worth more in a few years time than the price you paid.
Think about only investing in assets that have the potential to appreciate in value. You need a car, better to lease one. You need somewhere to live, aim to buy the roof over your head.
Get professional help
It is rare to come across a wealthy person who doesn’t have an army of advisers and lawyers to give them all the advice and help they need. Wealthy people don’t avoid taking risks, they just get wise about taking risks.
Develop a relationship with someone like Powers McCartan. It gives you someone to call upon when you need legal representation. The same thinking applies to using tax advisers and people who can guide you in wealth management.
Even if you don’t have millions in the bank, getting good advice on how to save tax and make the most out of your investments, is often money well spent.
You don’t have to be wealthy to get good professional help. The benefits can often outweigh the cost, so think of it as an investment in your financial future and wealth preservation.
Clearing your debt
You might wonder if it’s worth even thinking about growing richer if you are in debt. What you need is a strategy to reduce and eventually clear that burden.
Use simple but effective tactics like transferring your credit card balance to a card with a lower interest rate. This can make a big difference to the total amount you pay back. If you have too many high-interest debts, look at consolidating them into one low-interest loan.
Look at all your expenses and target areas where savings can be made. The money you free up can then be used to pay down debt. This will reduce the amount of time you take to repay your debts and will start creating a path towards wealth instead.
If you adopt the mindset of a wealthy person and work on breaking the cycle of debt by using some smart strategies and simple cost-cutting tactics, you will soon find that your healthy money habits start to pay off.
Niles McCann works as a personal finance consultant. He wants everyone to feel that they have their finances under control, and shares his tips and advice online through his articles as well as through social media and forums.