10 Things You’ll Need to Do If You Want to Get Rich
By Daniel Ameduri for Thought Catalog
This is a topic that I gave a lot of thought to when I was younger, not because I wanted to mimic the lifestyle of a rapper, but because I was always passionate about not being stuck at a job. I think doing what you love is great, but I think doing what you love on your own time, whenever you want is even better.
Financial freedom is a mindset that puts into motion a life of discipline so that you can achieve your goals.
Over the course of the past 17 years I’ve read nearly every personal finance book I could get my hands on. Of course it all started with Robert Kiyosaki’s book, If You Want To Be Rich And Happy, Don’t Go To School. This was his first book, before the Rich Dad Poor Dad book, a book that I highly recommend to all.
From the books I’ve read, mentors I’ve spoken with, and my own life’s journey, here are 10 actions that will make you rich.
One important note before I begin, there are may definitions of the word rich, to keep things simple I will be talking about getting rich financially, enough wealth to where you could go 10 years without earning a single dime and still have money left over.
1. Have a plan
You have to plan to get rich if you want to be rich. Even people who play the lottery have a plan…It might not be a very good one or even successful, but they do have a plan laid out, keep buying tickets until they win.
Having a plan is the difference between wishing you were rich and living rich before you actually become rich. I’m not talking about living lavishly, I am talking about being wise with your money.
Create more than one plan, I always had a long term plan, one where I guaranteed myself a significant amount of wealth over the course of 3 decades. My second tier plan was a way for me to get rich in 15 years; and my 3rd plan, the plan that I mainly focused on, was a 5 year plan.
You want to have fall back plans that are more conservative and guaranteed because in the beginning, creating wealth is difficult. Only after you have the knowledge, experience, and money does your wealth compound.
In my own life, this was huge; my wife and I are both relentless savers. Saving probably an average of 75% of our income over the past 3 years, prior to that we probably saved at least 25%. Not losing money you’ve earned, as well as taking the money you’ve earned and putting it to work is going to be a crucial part of your wealth building.
One of the most important values in my life is always thinking about how I will put my dollars to work. Think of each dollar as a potential employee or business, each dollar will happily work for you if you give it a job.
3. Focus on investments that cash flow
Stocks that pay dividends, rental properties, becoming a lender, or anything else you can buy that will give you passive income.
Forget about speculative or capital appreciation.
Every single time I tell people I buy houses for rental income, I always hear questions about the real estate market going down or the party being over for appreciation…I don’t care. I don’t give the value of my house a single thought. I want the income, it makes no difference to me if the house is worth $250,000 or $50,000, it doesn’t effect me. All that matters is how much money I am making from the property.
4. Buy at the right price
A great saying in the investment world is that you make money when you buy. Meaning, if the deal is structured correctly, you always walk into an investment wealthier than you were before. This goes for other things as well, including buying everyday items. Saving money because you are buying at the right price will add up to a lot over the years and decades ahead.
Never go into debt for a vehicle, consumer good, or product that doesn’t produce the income to service the debt. This is a powerful code to live by, because if you just live by this one rule, you will not only become financially rich, but this will open up the floodgates of freedom in your life. Do not become an indentured servant by going into debt for a piece of metal that you drive to and from work. It’s important to accept that no one cares what you drive or what brand your clothes are.
Sure, it feels great introducing your new car to friends for about the first 20 seconds, but after that no one cares; so don’t get stuck with a 2,190 day financing commitment.
6. Invest in your relationships
Mentors, clients, and your financial team. Whether it is your realtor or elderly neighbor who made a fortune in commodities 20 years ago, learn from other people and treat them with respect.
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