How to become rich & wealthy quickly - 6 habits of rich people

Creating wealth doesn’t have to be a burden it can be a fun way to pay off debt and then prosper year by year. I’ve read many personal finance books and followed blogs that help people with their money and I’ve seen six principals that are mentioned over and over again to build personal wealth and to become richer.

I have come to believe that if you follow these six principals you can lay the foundation for personal financial growth and then live a prosperous and happy life.

#1: Look To Increase Your Income​

One of the quickest ways to create and increase wealth is to earn more, or to develop more income streams.

If you’ve got a steady job then why not look for ways to get a raise, don’t just do the bare minimum to stay safe in your position, its’ worth far more to go the extra mile and get involved in projects where you get noticed.

If you can increase your income every year by 10% and you start at $30,000 then by the end of year five your income should rise to $48,315.

Getting more qualified also helps your income to increase, if you can continually strive to become a better professional by taking more and more professional courses you’ll become more sought after and able to survive downturns, when people do start to lose their job you’ll be last to go or if you are released you’ll find it easier to get another job.

Developing more income streams helps, if you’re in a steady job earning a decent amount of money you could continually push yourself to look for other ways to make money, you could sell items; you could create items to sell. If you’re really passionate about something look for ways to monetize that passion and you’ll soon see the money coming in.

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#2: Look To Cut Expenses​

There no point increasing your earned income if you can’t save the money; if you earn more but experience lifestyle inflation then this will not amount to wealth creation. For example if you earn $30,000 and spend $29,000 then you’ll have the capacity to save $1000.

If your income was to rise to $40,000 but you now spend $39,000 then even though you’ve increases your income your savings remain the same and you’re capability to generate wealth remains constant.

Rather than letting lifestyle inflation rise make a conscious effort to bank the money. If you’ve been given a rise of $10,000 then try to save all the money by living the way you lived before you got the raise, by striving to save more you’re capacity to generate wealth increases year on year.

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#3: Always Pay Off Debt Quickly​

Debt is a burden, no one has become wealthy by getting into debt for instant gratification, I am guilty of this and remember spending more than I earned and putting the excess on a credit card, in no time at all you’ll find yourself in a mountain of debt that you eventually have to face up to.

When you finally come to terms with the problem you have to spend money to tackle it, the instant gratifications of the past will not compensate for the burden you now face to pay off the debt.

If you do have debts then pay it off! It’s like having lots of leak in a bucket where you put your money in, the fewer leaks you have in this bucket the wealthier you’ll become.

Tackle your debt head on and get onto a debt management plan. One plan I would recommend would be to list all your debt from smallest to largest and then pay the minimum amount on all of them, you then divert all your surplus income to paying off the smallest debt first, this might seem counterproductive especially if you have other debt with higher interest, however, by throwing everything at the smallest debt you’ll pay it off quicker and continue your motivation to go on.

Once you’ve paid off the first debt you can then divert all the surplus income to your next debt and clear them one by one, it’s possible!

Once you’ve paid off your debt be careful not to let lifestyle inflation get the better of you, the surplus you now have should not go towards more needless products and service, instead save the money in a high profit account.

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#4: Pay Yourself First​

When you get paid your salary or wage you start to use the money for your living expenses, whatever is left over if any is then saved, what you’re doing is paying yourself last.

If you can pay yourself first then you’ll save more money which will increase and generate more wealth. When I was paid my monthly salary of £1600 I used most of it on living expenses, I roughly saved about £50 to £80 per month.

When I really thought about this concept I immediately paid myself £300 and then used the remaining money to get by, I had to make some easy and tough choices but I knew it was worth it in the long run because I was getting wealthier.

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#4: Grow Your Wealth​

It’s great to save money; it’s great to check your savings account from time to time to see that you’re getting wealthier. To get wealthier quicker you need to invest your money, before you start to invest you need to determine your tolerance to risk, are you averse or are you ok to invest in the stock market which will make you money over the long haul?

If you’re risk averse then find the highest rate of interest/profit account you can find and then continually compound your money. I am currently invested in an Islamic Bank account which is paying 4% profit every year and I am feeding the account with as much money as I can.

If you want to take a greater risk then thoroughly learn what you’re getting yourself into, don’t just give the money to someone to manage, learn the ins and outs of the market and take a more hands on approach. The stock market can be very risky but it can be rewarding at the same time.

#6: Live Frugally​

Frugal living does not mean living cheap, to me living frugally now will hopefully give me financial security in the future, I hope to live as a financially independent person who lives in perpetuity using the wealth that I’ve generated over time.

Living frugally means cutting costs and stretching your money as far as your imagination can take you, an emphasis on making things last longer and finding the best deals will translate itself directly to wealth.

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