If you’re serious about making money, there are a few things you need to know. It’s not just about saving but also about investing and passively and actively growing your wealth.
It’s not as exciting as buying far out of the money stock options, but it will get you rich over time.
1. Start with a small amount
The first step in learning how to get rich slowly is saving money. This can be as simple as putting away $10 per week into an envelope, shoebox, or even the cookie jar. This may seem small, but it will add up over time. Once you’ve started saving money, you can use that money to invest.
Investing is essential to building wealth, but you must do it consistently. Many people get rich quickly by making a significant one-time investment, but this isn’t an intelligent way to build wealth. Instead, investing a small amount of money each month is better.
Another thing to consider is paying off your debt before investing. Having debt will make it harder for you to save and invest. It’s also essential to avoid high-interest debt like credit card debt, which can cost you more than you earn through investing. It might not be as exciting as buying far-out-of-the-money options, but getting rich slowly is the best way to achieve financial security and independence.
You can get rich quickly by winning the lottery or inheriting a fortune, but investing money is the natural way to build wealth. Investing has many ways, but you must be careful to avoid getting ripped off. For example, don’t fall for financial fads like day trading, spread betting, and crypto.
Instead, invest in diversified asset classes and industries to minimize risk. This includes equities, bonds, property, and cash. The goal is to achieve higher than inflation rates of return on your investments. You can also increase your investment by earning more income. For instance, you can do this by enhancing your skills or taking online courses to improve your qualifications. This will make you a more valuable employee and command a higher salary.
The key to investing is consistency. If you save a small amount each month, this will add up over time. For example, if you saved just $5 each week, it would grow to $2,747 in 10 years, thanks to compound interest.
Before you start investing, pay off high-interest debt. This will free up a substantial chunk of your budget. It would be best if you considered starting a regular savings habit by setting aside a portion of your monthly salary. Lastly, ensure you have enough emergency funds to cover your monthly expenses. This will protect you from unexpected financial hardships and emergencies.
3. Save money
Saving money may feel like a challenge, especially with the current state of inflation. But there are ways to stretch your dollars further, even without significant lifestyle changes. Here are a few easy tips:
Cut back on eating out and cable, try to use cash instead of credit cards, shop at stores that offer sales (or better prices) during certain times of the year, and look for apps that round up your purchases to the nearest dollar, putting the difference into savings.
Set aside an emergency fund and stick to it. Keeping a few thousand dollars in reserve can help you avoid the stress of borrowing money in an emergency.
Save up to half of your rent by living with a roommate. That’ll immediately lower your monthly expenses, giving you much room to grow your savings in the future.
Make a 30-day rule: Before you buy anything significant, delay it for 30 days. This will tame the impulsive part of your brain and force you to think honestly about what you’re spending money on.
Reward yourself for completing a money-saving goal by setting up a dedicated savings account and placing the funds in it after 30 days. Having a separate entertainment fund is also helpful, as it can help you distinguish between non-essential impulse purchases and good old-fashioned fun.
5. Start a side hustle
Whether you’re looking to bring in extra cash or start something that can eventually replace your full-time job, starting a side hustle is a great idea. But before diving in, take some time to think about your goals and what motivates you. This way, you’ll be more likely to stick with it through the tough times.
To get started, list all your skills and interests in the first column and combine them in different ways to discover ideas for your side hustle. Once you’ve narrowed it down to a few options, researched, and reached out to others who’ve done it before to see their experience, you’ll also want to consider any up-front costs and how much time you can devote to your venture each week.
Once you’ve settled on a side hustle, put any money into your budget with a clear goal (saving, paying off debt, or investing). That way, you won’t just be earning extra income but putting it toward a specific purpose.
6. Get out of debt
If you want to get rich slowly, it is essential to pay off your debts. The easiest way to do this is by following the baby steps laid out by Dave Ramsey. You can also try to make extra income. This can be done through a side hustle such as driving for Uber or food delivery or by renting out your spare room on Airbnb.
Start by figuring out how much you spend each month. To do this, list all your expenses and compare them to your income. You can create a budget or use an app like Every Dollar. Once you have your budget, look for ways to cut expenses. Some ideas include cutting back on eating out, eliminating unnecessary purchases, or limiting how often you use credit cards.
After you have cut your expenses, start saving money. A simple way to do this is to put $10 a week in an envelope, shoebox, or old cookie jar. This may not seem like a lot, but it can add up to thousands of dollars over time.
Consider seeking additional income if you have more debt than you can afford. This can be achieved through a side hustle, such as dog-sitting or food delivery, or finding a new job that pays more. You can also try negotiating with your lender to lower your interest rate. This will not affect your credit score or report and can save you much money in the long run.