13 Basic Rules To Grow Your Wealth Effectively

Think of money as a tool.
That’s all those papers and coins are — a tool to
get you what you want. They aren’t the only way,
but it is a universally accepted exchange.
Thinking of money as a tool empowers you to
avoid many of the negative, intense emotions that
can be associated with it, and to make rational,
calm spending and saving decisions free of
emotion. Money is a tool. That’s it.
Accept that it takes time to expand your tool
kit.
It takes time to grow wealth. Period. “Time” in
this case means years, sometimes decades. This
can be a frustrating concept for young folks who
are rarin’ to earn that cash, accustomed to getting
what they want with the click of a button and
bombarded by stories of internet sensations who
made it big overnight and photographs of 20-
somethings with luxury cars and diamonds in
their ears.
Define “wealth”…
Do you desire a fat bank account, for uses to be
determined in the future? The ability to fund an
expensive hobby, like horses or photography? The
chance to take years off work and afford time to
raise your young children? Your definition of
“wealth” may, or may not, be a McMansion and
six sports cars. Whatever your definition is,
congratulations! You’ve established a goal that is
yours . Your definition of “wealth” is the one that
matters.
… then define “wealth” again.
Accept that you will end up spending vast
amounts of money on unplanned expenses. Your
car will break down. You will have kids before
you’re financially ready. You or a loved one will
incur a hefty medical bill. This is called life.
Money, that tool we keep in our pockets, will help
us meet life challenges. So take a deep breath,
relax, and accept the fact that your financial goals
will change time and time again. Staying calm
during times of unexpected spending will help
you keep your eye on the long-term prize;
freaking out or giving up on your savings plan in
the face of adversity will not.
Acknowledge that cash is king.
If you can’t pay cash for it, you can’t afford it.
Treat your credit cards like cash; this means
sticking to a lifestyle that suits your income level
so you don’t rack off more than you can afford,
and paying them off regularly. Do your best to
avoid assuming car loans — if you can’t pay the
sticker price, search for a used car or take
advantage of public transportation for as long as
possible. If you have a take a home loan, keep it
modest, and wait to look at homes until you can
afford to put at least 20% down.
Save.
This is frequently repeated advice, and for good
reason — the secret to growing wealth is to
accumulate it. Read up on the latest from
accountants and peruse personal stories online,
check books out of the library, or hire a
consultant through your bank to help with
financial planning; however you do it, you must
develop a savings plan. Once you have at least six
months of living expenses for you and your
family readily available, you can start to grow
your wealth through different types of funds,
according to the level of risk you want to assume.
Diversify your tool kit.
Talk to a certified professional about the benefits
and drawbacks of savings accounts, stocks,
certificates of deposit, IRAs, mutual funds, and
any other number of savings and investment
options. The key word here is “diversify.” You
want to build a broad foundation, so that if
something unfortunate happens to any one area
of interest, your financial ship simply bobs along
in a different direction, it doesn’t sink (and
neither do you). Remember that purchasing land
or a rental property, or upgrading a home you
currently own are also ways to invest.
Shop around until you find a no-fee, cash
back credit card.
Avoid complicated rewards point structures, or
even airfare cards unless you are a frequent
traveler; it can be difficult to gauge whether you
will actually use these rewards and the value back
on each dollar that you spend can be minimal.
Annual fees add up and mean you often end up
paying for your plane ticket or hotel room
yourself with the fee. Once you find a card you
like, stick with it for maximum benefit to your
credit score.
Shop around, period.
It is tempting to purchase what we want, when
we see it. Online shopping, however, means that
nearly every product can be compared to a
competitor, whether in your community or across
the globe. Take the time to compare prices before
you buy, especially on big ticket items. Once you
have a good feel for the market, don’t be shy
about negotiating for a lower price from a local
merchant if you find an item cheaper elsewhere.
Expand your mind.
Get creative in seeking out ways to increase
income — there are a lot of ways to earn money
out there. Make a list of your skills, whether
learned in a professional setting or elsewhere,
then hop online to do some research, and talk to
everyone you meet about how to possibly
leverage those skills. Your local chamber of
commerce, or meet up groups advertised online,
can be good places to start. It’s a freelancing
nation, and you may be surprised at what and
how much you can pick up on the side of
conventional employment.
Get your hands dirty.
Nothing is ever “too small” or “beneath you” in
the money-growing game. Do not shirk from the
hard jobs, the dirty jobs, or those that pay only a
little in the beginning — pick them up, see where
they go, and remember to save, save, save.
Find a good accountant.
Once you have money, you don’t want to give it
away, do you? That’s exactly what you do come
tax time — give your hard-earned cash back to
the government. Tax codes are complicated, to
say the least, so make sure you are giving exactly
what you owe and not a penny more by enlisting
the help of a seasoned professional. Though
Certified Public Accountants are more expensive
than do-it-yourself options, what they save you
this year and in the years to come truly make this
investment worth it.
Treat money management like a job.
Set aside time each week to review your financial
accounts. If you’re starting out, this time may be
as simple as going over your credit card
statement to confirm that every charge is
legitimate; if your financial picture is intricate
and complicated, this could mean a weekly
meeting with your financial planner or bank.
Take time to study articles online, read a book
from the library, or attend a local class that will
teach you more about what all of those financial
terms mean and how they apply to you.