5 Habits To Build Your Wealth and Success in 2018
2018 is just around the corner. Before we bid this year goodbye, it’s also the perfect time to start reflecting on habits that we should either continue or leave behind to build our wealth and success in the new year.
The LTH Team has compiled some useful habits that could help you step up your game towards financial success. By incorporating these into your routines, you’ll fast track your way to massive wealth and success:
Spend Like A (Frugal) Millionaire
Did you know that some of the world’s most affluent people are frugal? Even if they can afford to live lavishly, they maintain a low-cost lifestyle. Perhaps it’s also the reason why they are able to sustain their millionaire (or billionaire) status in life.
Take Warren Buffett for example, who eats at a local fast food chain for breakfast and doesn’t spend more than $3.17, as compared to average earning people who would regularly buy overpriced coffee on top of other expensive purchases.
Part of the habits to build your wealth is to simply spend less than what you earn. To help you jump-start a more prudent lifestyle, start by practicing the 50-30-20 rule. 50% of your income goes to your non-negotiable payables like bills, rent, transportation allowance, etc., while the next 30% of it you can use for your personal needs and wants. Lastly, the 20% should automatically be allocated to your investments. This way, you’ll be able to consistently track where your income goes, and most importantly, start watching it grow.
Prepare For Your Retirement
Out of all the habits to build your wealth, this one is the most important thing that many people tend to miss out on. Don’t delay it any further and start your Individual Retirement Account (IRA) this year.
Once you have successfully opened your IRA, you have to be committed to it by thinking about the long term results. You have to understand that the money you contribute to your retirement account is money that you are prepared to invest for a relatively long time, so it can grow to its full potential. In simpler terms, this fund belongs to your ‘future self’, hence you should not do anything about it until the right time comes.
Grow and Diversify Your Investments
If you haven’t noticed by now, wealthiest people have one thing in common: they have investment accounts.
I cannot emphasize enough how crucial it is to start investing as early as possible, because the sooner that you do, the longer your assets will be able to grow. I know how tempting it is to overspend on things that will make you the happiest today (and it’s not wrong to occasionally treat yourself) but investing over time enables your hard-earned wealth to work for your benefit towards financial freedom.
Strategic investing requires a properly diversified portfolio to ensure that you create a sustainable long-term growth to build and establish a healthy financial future. Do not gamble on a single investment vehicle, instead, you should have a balance of different asset classes such as global equities, fixed income, and commodities.
Automate Your Finances
In order to grow your finances further, your money should automatically go directly to your savings and investments with minimal intervention as possible. The only way to make this possible is by automating your finances.
Automation is essentially putting aside a portion of your money to be automatically transferred to an account repeatedly. In this way, you don’t have to worry about consistency in trying to save and invest as you make it happen without even thinking about it.
Set yourself up for long-term success by minimizing (or better yet cutting off) your credit card use as much as possible. Take the time to study your patters when it comes to impulse buying that leads to excessive use of card.
This year, prioritize your debts to stop it from continuously incurring interests which you could have allocated for increasing your wealth. Free yourself from debts and stay focused on your goal to financial freedom.
Do you have any other tips to add to the list? Give us a shout-out!
Want to learn more about investing? Check out CEO Elle Kaplan’s firm, LexION Capital.