A few days ago I was browsing to check what's the most trending topic on google search.
How to become rich faster, How to become a millionaire, what job will make me rich in 5 years, the science of getting rich, and such millionaire-related topics were among the top trending topics on google search.
What does that tell you? A large proportion of the world's population wants to become rich someday. According to the Pew Research Center, 79% of millennials in America want to be wealthy before they turn 40. Besides, over 50% of Generation X (born between 1965 - 1980) in America think they'll be moneyed someday.
Therefore, in this article, we will explore some ways you can certainly build wealth in 2022. Keep reading.
Save Before Spending
George S. Clason, the wealthiest man in Babylon, says, "A part of all I earn is mine to keep." We all know that most people save whatever remains after spending. This is wrong! In fact, it's the easiest way to drown in debts and live a miserable life.
If you are looking forward to belonging to a millionaire class someday, normalize saving first before you spend.
Reasons For Saving Before You Spend
a). It guarantees financial stability. Note that saving first ensures you spend less than you earn, and this puts you under financial control. Let's say you earn $1000 monthly. If you save $600 monthly, you'll have accumulated a considerable amount in your bank account in 12 months.
You can then invest with this cash and continue saving the next year for another big project. If you are consistent in your saving plan, you'll have five big projects to make you a millionaire in a few years.
b). Saving will multiply your money. Keeping money in your bank account, especially the fixed deposit accounts, helps you earn more cash. This account is like an investment since you earn interest each month.
Actually, fixed deposit accounts can play a major role in your wealth creation journey as the interest rate is high (3.50% to 7.50%), and you are assured of fixed returns no matter the market fluctuations.
Have A Passive Income
We've discussed saving before spending. You're probably stressed since your income is barely enough for monthly expenses and savings. Right? Don't worry, here is the solution; Have a passive income.
This is the money you make without doing a lot of active work. For instance, you can create an online course, or ebook, and earn whenever someone purchases it. Here, you make money even when you are sleeping.
Other ways of making passive income include:
Start a dropshipping business
Create a blog and monetize it
Start an online store, e.g. fashion store.
Create an app
Affiliate marketing
Invest in stocks
Invest in real estates
Rent out your space e.t.c
All these methods and many more can help you make a passive income. This can help boost your savings and build wealth within a short time.
Most millionaires in the world say passive income is their leading source of wealth. Look at Andrian Brambila, a 32-year-old man whose net worth is 4 million dollars. His main streams of revenue are all passive; investing in real estate, stocks, affiliate marketing, and e-commerce. What about Elon Musk? He earns millions each day from his passives, including Twitter. Incredible, right? You can be tomorrow's millionaire too if you establish your way of making passive income today.
Invest In Real Estate
According to Andrew Carnegie, one of the top real estate billionaires and industrialists in the United States, 90% of the world's billionaires build their wealth by investing in real estate.
Buying land is a one-time investment plan, and the value keeps increasing each day. Let's say you buy a property worth $5000 today. Do you know you can sell it at $20,000 in three or four years to come? Isn't it a great path to wealth building in 2022?
If you don't have enough money to purchase a property in a good area, you can consider investing in lower-cost-of-living zones, especially rural areas. Start with one property, sell when it appreciates, and repeat the process until you become a real estate guru and eventually a billionaire.
Avoid Bad Debts
You are probably wondering how avoiding debts can make you wealthy, right? Let's say you take a personal loan of $20,000 to pay in five years. The interest is 7%. The total interest (additional amount) you'll pay for that loan will be:
$20,000 * 0.07 * 5 = $7000.
Imagine your $7000 will go to lenders just like that. What if you didn't take that loan? Wouldn't that $7000 go to your savings or investments? Do you see the point?
This mistake of taking one loan after another has left many drowning in debts and moving from one emergency to another. There are arguably good debts, like mortgage loans, as they can boost your wealth-building process. However, you'll never have financial freedom if you keep taking loans and using credit cards to fund your extravagant life.
Try your best to pay off that debt today. Avoid taking loans and using credit cards at all costs. If you can't afford it, don't buy it. If it's not a need, don't pay for it. Adjust your lifestyle too. These practices will help you save more, hence building more wealth.
Invest As Much As You Can
You can all agree with me that if you want to build wealth over a short period, invest as much as possible, right? We discussed about investing in real estate. The practice can make you wealthy, yes, but investing in a diversified portfolio will grow your fortune faster than you can imagine.
Look at Elon Musk, Dan Loeb, Warren Buffett, plus many other billionaires. No one among them has one investment. Do you know why? They know things happen, and one investment can go down the toilet overnight. So, what happens if you invest in real estate as your only source of income, then one-day things go haywire in that sector? Therefore, to lower the number of risks you're exposed to by having one asset, diversify your investments.
Also, having multiple investments will help maximize your returns. This will make you a millionaire in a few years.
Other than real estate, some other investments that can make you wealthy in 2022 are;
a). Stock market
b). Mutual fund schemes
c). Bank fixed deposits
d). Investment firms
e). Government bonds
Key Take Aways
A large proportion of the world's population wants to become wealthy someday.
Some ways of building wealth are; saving before spending, having a passive income, avoiding bad debts, and diversifying your investments.
Almost all billionaires and millionaires in the world make 90% of their fortune by having passive income. In addition, all of them have multiple investments to maximize their returns.
To achieve your goals of building wealth in 2022, you need to make some sacrifices like; saving more than you spend, avoiding using credit cards to finance your luxurious life, and stopping living beyond your means.
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