Ideas to Increase Wealth and Thrift
Increasing wealth is an admirable goal for many people. Although to some that goal may seem to be selfish, if wealth is used to help others it can be a great thing. Accumulating assets may also help protect against economic downturns and provide adequate income after retirement. So how do you increase wealth? That depends on your situation. One great place to start is to see if you are generating more income than your expenses. If that is the case then you have income you can start to save or invest.
Some things to consider for wealth building (please note this information is not from a financial advisor perspective, nor are we providing what would be considered financial advice falling under legal requirements) are as follow:
- Savings Account – If you do not have a savings account you should open one now. Many financial institutions will allow you to open an account with as little as $100. You should put money into your account that eventually will equate to what you would need to cover six months of living expenses. That way if something unexpected happens you will have a cushion to help overcome the difficulty.
- Consider your tolerance for risk and your age. If you are younger you may be able to recover quicker if you make a poor investment as you should have more income earning years to increase your wealth. If you are fearful of potentially losing money you are more risk adverse than some people and will need to make your investments conservatively according to your comfort level.
- Life Insurance – Although some people think life insurance is a poor tool for wealth building, protecting your loved ones at the time of your death can be great way to provide financial stability after you are gone. It is always sad to find out someone has passed away and not provided a way for their loved ones to even cover the costs of their interment.
- Using a financial advisor to help invest in stocks, bonds, mutual funds, etc. Although you may have enough knowledge and time to invest on your own, for many people using the services of a good licensed professional is a smart way to grow your wealth.
- Real Estate – for some people investing in real estate can bring strong returns and increase wealth. One thing to consider when it comes to real estate investing is will you be taking on the responsibility of leasing and / or maintenance, or will that be outsourced to someone else? If you are outsourcing that will play a part in how much money you are able to keep for yourself. There are many different real estate options to invest in if you choose to pursue them. Some of those choices may be more complex than others. Working with professionals to help discover the best options for you, close the deal, and keep your investment on the right track is important.
- If you have the resources and interest in startup companies then angel investing may be a good route to pursue. Many cities like Birmingham have angel investors who will meet regularly, evaluate opportunities and invest when the deal looks right. If you have a startup then the avenue of seeking angel investors can be a lucrative one for you.
- Cutting expenses. Although many people say you cannot save your way to profitability you can spend your way into bankruptcy. Being prudent with your expenditures (particularly long term commitments) can free up cash flow that can be invested to grow your wealth.
- Increase income. Some people take extra jobs, increase their hours (if hourly), or seek a promotion to increase their income. If you are not able to do any of that do not despair. Making wise choices with your money such as buying quality products, repairing items that make sense and increasing your knowledge when you can.
Becoming thrifty is a good idea for people of every financial status. Although the lure of having the newest, most fashionable, and most expensive item can be addictive, the cost to maintain a lavish lifestyle can greatly interfere with wealth building. Some ideas to consider for developing a thrifty lifestyle:
- Consider using an item longer than you typically would. This can be particularly thrifty when it involves cars, clothes, electronics, etc. Although having a new car every few years, or a new phone every year can be fun, it comes at a cost. Maintaining and using what you can to extend its usual lifespan is a great way to save.
- Selectively buying things you need when they are on sale is a thrifty way to live. Just because something is on sale does not mean that it should be purchased though, and just because it is “on sale” does not mean that you can truly save money by purchasing the item. Knowing what the costs of something is normally and evaluating the sale price can help you determine if it is wise to purchase the item.
- Using coupons obtained from various legitimate sources is a good way to be thrifty.
- Shopping for appliances around holidays when special sales are available is a great way to be thrifty.
- Planning vacations to prime locations when it is a little less busy is thrifty (not that there is anything wrong with going when it is busy, but it will probably cost more in time, money and frustration than if you selected different dates).
- Need some furniture? Check in your neighborhood to see if anyone has something they wish to sell that matches what you want.
- Yard sales can be a thrifty way to find your next treasure at a reasonable price.
- Carefully shop online using websites like EBay, Craigslist, and Facebook Marketplace to save money. Be cautious though as scammers are out there and can take your money, or worse.
- Sell the items you no longer use and take the proceeds to either buy something else, or save for another use.
- Make sure your thriftiness does not turn into miserliness. Savings can be good, but if you put yourself, or your loved ones in extremely uncomfortable situations just to control costs then the thriftiness has turned into a problem that needs solving.
Accumulating wealth and being thrifty are complimentary. So determine what works best for you and start today.