A life of prosperity and financial serenity? “Sounds fantastic,” you say. “Sign me up!”
The problem is, it’s easy to confuse financial success with a lavish movie-star lifestyle. In reality, they could not be more different. The former will give you the freedom to live without financial worries so you can pursue your dreams and ambitions and build more wealth. The latter will leave you scrambling to keep up a facade that sucks your finances dry.
How do financially successful people stand apart? How is their attitude toward money different from those who constantly struggle to grow their nest eggs?
First of all, financial gains aren’t made in a week or a month. It will probably take years to see dramatic changes. But if you are willing to put in the time and effort, your wealth will steadily grow.
You can begin now to accrue monetary security and financial success if you follow these 8 core habits of highly successful people.
Your future financial success starts with the simple act of setting a budget. A budget anticipates your financial needs and sets limits on your spending. A good budget is realistic. It will help keep your spending habits in check and allow you to reach your financial goals.
Some business advisors suggest the 70/30 rule, which advises you to live on 70 percent of your after-tax income. In this setup, you will pay for your living expenses, such as housing, loans, utilities and food, out of the 70 percent.
Of the remaining 30 percent, 10 percent should go into savings, 10 percent should go into investments that will grow your wealth and 10 percent can be given to charity as a way of giving back to the community.
However you decide to divvy up your budget, it will be helpful to set up automatic bill payments and transfers. These practices will ensure your financial house stays in order.
Save first, then spend. If you can do this throughout your career, it will give you peace of mind, as well as a nest egg to fall back on when you need it. And at some point, we’re all going to need it. As mentioned earlier, a good rule of thumb is to save at least 10 percent of your paycheck, but some financial advisors recommend saving as much as 20 percent.
This saving strategy will ensure that you have a robust emergency fund to see you through the gloomiest of financial days. The bottom line is to create savings to safeguard against unexpected situations that may arise.
Have a “weekly money date” with your finances to check in on your accounts. This will help you cultivate the habit of tracking your money, including where and how you are spending as well as whether or not you’re staying within your budget.
It’s also important to track your net worth, which is the total worth of your assets (what you own) minus your debt and liabilities (what you owe). Keeping tabs on this will help you see clearly how you are doing financially so you can make adjustments to your budget as needed.
No matter how euphoric a spending spree may make you feel, buying stuff doesn’t make you wealthy—or happy, for that matter. The latest gadgets, the nicest cars and the trendiest clothes will all suck away your wealth rather than increase it.
Financially successful people know that the key to retaining and building wealth is to live economically. By all means, enjoy your life to the fullest. Invest your time in the people you care about and in experiences that are meaningful. But control your impulse buys, because an abundance of “things” will never give you financial or emotional prosperity.
In the fast-paced and often cutthroat world of business, it’s easy to fixate on the idea of being a tough go-getter. However, changing the narrative is much more productive. Instead of going on the attack, think about ways you can give back and be of service.
If you are helping others, good things will come back to you. If you are a giver, you will help others reach their potential and people will be inclined to return the favor. Challenge yourself to be generous with your time and money and you may find that it will pay in ways you would never have anticipated.
That little piece of plastic in your wallet may be weighing you down more than you realize. Credit card debt and loans are some of the biggest liabilities that keep people from flourishing financially.
It is difficult to amass wealth if you are grappling with financial commitments beyond your means. Being aware of what you owe is the first step, but avoiding and eliminating debt as quickly as possible will set you up to achieve lasting financial success.
As the saying goes, “It takes money to make money.” Successful people understand that steady wealth flows from a solid investment plan. This means contributing to a 401(k) plan or other secure investments to ensure your monetary comfort in the future.
Along with picking good investments, successful people also create their own opportunities. This means asking questions, taking strategic risks and taking the initiative to build success.
You may decide to invest in property or a profitable enterprise. Or you might build a business in commerce and sales. Whatever you do, always take the time to research all possibilities and make calculated and logical decisions.
Financial success does not happen overnight. Rather, it is accrued over years, and often several decades. Unless you win the lottery, you are going to need to focus on long-term financial goals and create the habits, prospects and opportunities necessary to get you there.
Don’t compare yourself to others. Instead, keep your focus on the financial road ahead. The key is to start good habits and set reasonable goals you can achieve now, even if they are modest. Your financial success is built over the long haul.
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Start with these 15 steps and watch your fortune grow. You may find yourself retiring long before your hair turns gray.