Last Updated on Apr 1, 2020 by James W
Everyone wants to build a fortune. It doesn’t necessarily have to be overly big and lavish. Just enough to keep us provided for, to make sure that we can pass some security on to the next generation. However, that requires a good deal of work and savvy on our end. We need to start being responsible with our money now. In this article, we’re going to look at how you get to that stage. Which steps are necessary and which options are available.
The essential step of looking where you’re going
Before you start deciding on where you’re putting your money, you need to know how much money you will be able to put towards it. Whether you’re saving or investing, it’s recommended that you put 15-20% of your income towards growing your money. Yet there are many who are putting a lot less than that in. To free up the cash you need to start building your fortune, you have to start budgeting. Finding the ways to make the cuts in your lifestyle that you need. There are plenty of guides to creating a budget. It’s not too difficult, it’s just a matter of staying disciplined.
Taking care of debt
Outside of that 15-20%, there has to be another cut of the money that you won’t be spending. This money, instead, needs to be put towards getting rid of creditors. Ensuring that you’re kept up to date with all loans and out of debt. Be strategic about your repayment plans. Cut down the amount you owe in the long-term by tackling the highest-interest repayments first. If you need to, make sure you sign up for automatic payments. You don’t want to be in the position of acquiring late fees because of simple human error.
Regarding building your fortune, it’s usually an argument between two different schools. Saving and investing. The obvious benefit of saving is that it’s reliable. Your money’s being kept in one place. It doesn’t involve as much risk as investing. It’s also the most reliable way of ensuring you have retirement money waiting. However, it requires a longer-term change to your lifestyle. You need to continuously budget, to continuously save. In comparison, investing is a relatively short-term change. You build the capital you need to invest. Then, on your success, feed some of the returns back into the process. Meaning you keep more money for yourself.
Perhaps the most common form of investment is trading. As we have said, it can be less disruptive to everyday life. At the same time, it is much higher risk. You can lose all your money if you’re not careful. Care is something it requires a good deal of, too. If you’re getting into forex trading, take the time to learn. Use a demo account to figure things out before you start putting in real capital. Diversify how you trade so that you’re able to use some trades to mitigate the risk of others.
Investing in assets
If you find that the world of forex, bonds and stocks is a whole other language, there are more intuitive methods to do it. Investing in physical assets still takes effort and learning. If you’re getting into the housing market, you need to learn when and what to buy or sell. Similarly, there are those who get into buying and selling antiques, which requires more niche knowledge. The gains also aren’t likely to be as high as trading in the markets. But still higher than saving.
There are others who prefer a more hands-on approach, too. To know that their work is being put into making the investment safer. For those people, starting a business could be the key. However, starting a business isn’t the only way to get into it. You can also become an investor to others. Become a partner in an existing business. Or to buy into a franchise. You don’t necessarily have to be riddled with ideas to succeed in business. You just have to be able to spot the right opportunities. Then use commercial sense to improve that opportunity.
Whether you save or invest is up to you. The benefit of saving is that it is relatively secure. The biggest danger to your savings is the effect of inflation reducing its value. On the other, the risk of investing is losing all your money. However, the potential rewards are even greater. Investing is the only way that a person gets really, really rich. The choice is yours.