Millionaire advice: How to get rich?

Many people think that getting rich must be a complex, fancy process that’s out of their reach. Though there are many paths to financial freedom, the reality is that building wealth can be a series of simple, small steps that you accomplish over time.

Click the Image! 10.000$ are yours!

Firstly, there are some ways to capitalize on a free money giveaway, no strings attached, that you may want to try to get in on.  All over the world, millionaires and billionaires giving money away as I do also, are handing out cash to those that are in need.  If you are in need of some assistance, perhaps this is a good option for you.  Once you find a list of millionaires that give cash to help out others, you can write to them.  If you are saying, I need cash now, let's explore how you should construct a letter to try to get in on a free money giveaway, no strings attached.

Also, you can try to make money yourself. As you know already, internet is one of the markets that is expending extremely fast. Maybe you have a good idea for online home business that could bring quite a buck? Then you should definitely go for it! I am also willing to help you develop in this field! 

In this episode I’m going to give you 5 principles of building wealth. If you’re already following them, you’re on the right path to achieving financial success. If not, you’ll know exactly what to do.

Principle #1: Start Saving Early and Automate It

One of the most important factors in how much wealth you accumulate depends on when you start saving. Starting early allows your money to compound and grow exponentially over time—even if you don’t have much to invest.

Never make the mistake of thinking that you’ll start saving in the future. If you wait until you have more money, get a raise, earn a bonus, or get a tax refund, you’re burning precious time. That’s because waiting to invest even small amounts today will really cost you in the long run.

For instance, let’s say you invest $200 a month starting in your mid-20s and get a 7% average return. If you do that for 4 decades, you’ll have close to $525,000 when you’re in your mid-60's.

But if you wait to start investing until your mid-30s and invest twice as much each month, or $400, you’d only have about $485,000 to spend during retirement, assuming the same return.

In other words, waiting 10 years to get started means you had to pay more out-of-pocket for decades—and left you $40,000 short!

Because it’s so easy to procrastinate saving, the best strategy is to automate it. Have money automatically transferred from your paycheck or bank account into a savings or investment account every single month.

Putting your financial future on autopilot simplifies your life and insures you’ll slowly get rich. I’ll tell you more about where to put your money in next principles.

Principle #2: Save Money for the Short-Term

Though we tend to use the terms saving and investing interchangeably, they’re really not the same thing. Savings is the cash you keep on hand for short-term planned purchases and unexpected emergencies.

For instance, if you’re saving money for a down payment on a house that you plan to buy within the next year or two, keep it 100% safe in a high-yield bank account that’s FDIC-insured.

Your savings should never be invested because the value could drop at the exact moment you really need all the money.

If you don’t have an emergency fund that’s equal to at least 3 to 6 months’ worth of your living expenses, make accumulating one a top financial priority. Set aside 10% of your gross pay until you have a healthy cash cushion to land on if you lose your job or can’t work for an extended period of time.

Principle #3: Invest for the Long-Term

Investments are the opposite of savings because they’re for your distant future, like retirement. If you’re relying on being healthy enough to work until the day you die, or on living off of Social Security as a sole source of income, that’s extremely risky.

Over time, a diversified stock portfolio has historically earned an average of 10%. But even if you only get a 7% return on your investments, you’ll have over $1 million to spend during retirement if you put aside $400 a month for 40 years.

So start investing a minimum of 10% of your gross income for retirement. Yes, that’s 10% in addition to the 10% for savings that I previously mentioned. Consider these amounts monthly obligations to yourself—no different than any bill with a due date.

If you think that’s more saving and investing than you can afford, start tracking your spending carefully and categorizing it. I promise that when you see exactly how you’re spending money, you’ll find opportunities to save it. Then divert those amounts to savings or investments instead.

Principle #4: Use Tax-Advantaged Retirement Accounts

If your employer offers a retirement plan, like a 401(k) or a 403(b), start participating as soon as possible—especially if they match some amount of your contributions. Here’s why matching is such a big deal:

Let’s say you get a full match on the first 3% of your salary that you contribute to a 401(k). If you earn $40,000 a year and contribute 10% of your salary, that comes out to $4,000 (10% of $40,000) a year or $333 a month. If that’s all you invested over 40 years with a 7% average return, you’d have a nest egg in excess of $875,000.

But now consider what happens when your matching funds kick in: If your employer matches contributions up to 3% of your salary, they’ll add an additional $1,200 (3% of $40,000) a year or $100 a month into your account.

Now you’re socking away $5,200 ($4,000 plus $1,200) a year instead of $4,000, which means you’ll have over $1.1 million after 40 years. That’s about $260,000 more thanks to those additional matching funds!

Even if your employer doesn’t match contributions, I’m still a big fan of using workplace retirement accounts because they give you multiple benefits. Not only do they automate investing by deducting contributions straight out of your paycheck before you can spend them, retirement plans also save you money on taxes each year. And you can take all your money with you—including your vested matching funds—if you leave the company.

If your job doesn’t offer a retirement plan or you’re self-employed, it’s easy to create your own with an Individual Retirement Arrangement or IRA.

Principle #5: Don’t Pay High Interest

Every dollar of interest you pay to a lender or a credit card company is a dollar that won’t be making you rich.

Get rid of high-interest debt as soon as possible so you can put your money to better use. Make a list of your debts and the interest rates you’re paying. Reducing the highest-interest accounts first will save you the most money so you can use it to pay off the debt even faster.

Click the Image! 10.000$ are yours!

But if you want the satisfaction of eliminating a smaller debt first, even if it isn’t your most expensive debt, that’s fine too. The idea is to be conscious of what you’re really paying on your debt and to create a plan to cut your interest payments. Remember that if you’re only making minimum payments on your credit cards, you’re making the card company rich, instead of building wealth for yourself.

Financial Advice To Get Rich

The key to building wealth is to start saving and investing right away. Don’t get discouraged if you have to start small; putting away just $25 a month is better than nothing. And if you didn’t start investing in your 20s, don’t stress out about it—simply take action and get started right now.

Setting up your accounts and automating contributions is a powerful step in the right direction. Years from now when you’ve got savings and investments to fall back on or to fund the lifestyle of your dreams, you’ll be really glad that you took control of your financial future.