In America today, 75% of the population is living paycheck to paycheck. Around 50% of the population doesn’t even have $1000 in savings. This is a tremendous problem. How are these baby boomers going to retire? They have no money! There are three basic steps to creating wealth. Nobody who has created massive wealth in their life has done it without following these three steps. In this article, we’re going to be breaking down these three steps and how you can use them.
1. Make more money
Income is the number one indicator of how wealthy someone will be. As the saying goes, it takes money to make money. The more you earn, the more you will have to invest. Start by finding various ways that you can increase your income today. Whether it is a side hustle, a side job, or a small business idea, extra income is extra income. In general, focus 90% of your time on increasing income and 10% of your time on saving income.
2. Keep money
A lot of people are horrible when it comes to finances. A lot of people will spend any extra money that comes in. You can argue that this is one of the major causes of the paycheck to paycheck epidemic that is in America. People don’t know how to save! In general, you should be saving at least 15% of your income every month. Your goal should be to save 30% of all of your income. If you can do this, it means you are in a pretty good financial situation given your environment and economy.
3. Save to Invest
Let’s face it. You can’t save yourself to financial freedom. The numbers just aren’t in your favor. However, you can invest your way to wealth. Focus on investing your money rather than save it. This could be into stocks, real estate, or a small business. I’d recommend investing in something that you are passionate about and has growth potential.