When you’re young, you’re likely more concerned about getting money so you can spend money. But as you settle into your life and start looking toward your future, you’ll soon discover just how important it is to build your wealth and set yourself up for a happy and financially sound lifestyle as you age.
To help you in getting started with this now, here are three tips for building your wealth.
Get Serious About Saving
Although saving your money isn’t the most glamorous thing to do with your cash, by consistently contributing to a savings account for all of your working years, you should have a decent nest egg to retire with once you’re no longer working.
To make saving regularly a little simpler for you, Jeff Rose, a contributor to Forbes.com, recommends that you commit to saving a certain percentage of your income out of each paycheck that you get. At first, you might only want to start with five or ten percent. But as you start making more money in the later years of your life, you may find that you’re able to comfortably live off of 70, 60, or even 50 percent of your income, which would allow you to save 30 percent or more on a very regular basis. And once your pay starts to rise, these percentages will allow you to contribute a lot of money into your savings account each month.
Make The Right Investments
While saving is a great strategy for building your wealth, if you really want your wealth to start growing exponentially, you’ve got to take advantage of compounding interest and start investing your money.
When deciding how to invest your money, Andrea Coombes, a contributor to NerdWallet.com, shares that you need to consider how long it will be until you’ll want to tap into the money you’ve invested and how you feel about taking risks with your money. Depending on your answers to these questions, you might find that you’re more comfortable with term deposits or more lower-risk investments. But if you have the time and the nerves, investing in the stock market or other high-risk options could offer you a big payout later on in life.
Aim For Multiple Sources Of Income
To put you in the best financial situation as you get close to retiring, Wes Moss, a contributor to The Balance, suggests that you should try to set up multiple sources of income for yourself to be getting each month. For many retirees, these sources of income will include things like Social Security, a pension, or other government benefits. However, if you used your money right earlier on, you could also be getting money from rental income, financial investments, interest on your money, and more.
If you’re ready to start really building your wealth for the future, consider using the tips mentioned above to help you accomplish this.