Wouldn’t it be great if work were a choice and not an obligation? Wouldn’t it be nice to have a job you loved so much, you didn’t want to stop doing it anyway? And what if you could earn money while sleeping, going on vacation and relaxing? These are some of the keys that may seem impossible but actually can create great wealth for anyone.
When we’re growing up, were told to get the skills we need to go work for someone else, collect our paycheck, put it someplace “safe” like a checking account and count down the days to weekends and retirement. With so many people hating their jobs and living paycheck-to-paycheck, it’s clear that this plan doesn’t work. Even if it does, it’s a sad way to live.
When I started studying insurance, wealth creation and management, as well as job satisfaction, I realized that the answers to financial freedom were right in front of us—we just weren’t told it all directly. So I decided to put the key points of these findings into a single blog post so that you can have the tools and knowledge you need to create the life of your dreams. Here is what I discovered:
Find a field you love and become an expert at it (or create an outstanding product) and launch your own business
Nearly half of all millionaires in the US got that way by starting their own businesses. If you work for someone else, you’re making it harder on yourself to become wealthy. Plus, there’s something amazing about being your own boss. (I haven’t had a boss in 20 years.) When you work for yourself in a field you love, it doesn’t feel so much like work anymore. It feels more like you’re building something amazing.
If you’re not sure how to start a business, you can read my articles 5 Steps to a More Exciting and Lucrative Career and How to Launch Your Dream Business. But, in the end, it will come down to you and whether or not you’re willing to take action. Starting a business is a risk but you can always start it as a side gig. (Check out 14 Side Gigs That Pay Well for some ideas on great side gigs.)
Becoming an expert at something is one of my favorite ways to for wealth generation. This can increase your income dramatically over time. People are willing to pay a premium to get the best—whether it’s advice, a product like a phone or laptop (think Apple) or something mundane as dental work. Learn all you can about the field you want to be in, how to be great at it and what your customers truly want. But be patient. This takes time. As the saying goes, there are no overnight successes. It just seems that way.
Once you have something great and tangible in place, don’t hesitate to let the world know. Don’t be too modest and don’t sell yourself short. Get those business cards and website made, get on social media and tell the world what amazing work you’re doing!
Spend like a wise person (a.k.a don’t be an advertiser’s fool)
A lot of people spend without thinking. They say things like “I want a new car.” “I want a boat.” “I want to go on vacation.” “I want to eat out even though I’ve done that three times already this week.” Stop and think—be selective on what you spend your money on. Don’t let advertisers tell you what to do with your hard-earned money. Their goal is to part you with your money. They don’t care if you can pay your bills or if it costs you your marriage.
I talk about being selective and mindful spending in my articles Mindful Spending: The Secret to More Joy and More Money and How Selective Spending Increases Your Net Worth. I wrote those articles because I see too many people just blowing their money and then complaining that they’re broke or how they wish they were rich. If those people would just think it through before spending, and take what they save and invest it (see below) then their money problems would eventually go away.
Invest like your future depends on it (because it does)
How is your money working for you? Do you have it parked in a checking or savings account that earns little to no interest? Investing is one of the big actions that separate the rich from the poor. The rich invest and use the power of compound interest (To learn more about the power of compound interest, check out Compound Interest and Passive Income: A Simple Explanation That Will Transform Your Financial Future).
Dividend stocks are one of the best investments out there. You need very ittle money to start but can have big returns (thanks again to compound interest). Also, you can find higher-interest savings accounts, like I mention in 10 Easy Ways to Earn Passive Income.
Even small percentages can add up—especially if you can increase a percentage or two in each investment avenue. For example, if you switch from a savings account that earns you .5% to one that earns you 2% and switch over your current mutual fund earning you a 6% average return to one that earns 8%, you’ve just given yourself an annual gain of 3.5%. Plus, if you switch to a cash-back credit card that earns you 2% (plausible these days with cards like ones from Fidelity and American Express) from one that didn’t give you any, that’s another passive gain you can add to your income stream. Because of the magic of compound interest, this can make a huge difference in the long run.
On top of that, if you move any extra money you have beyond a 3 to 6 month emergency fund out of your savings account as soon as possible and into an account (like an index fund) that earns you a much higher percentage, that will also make a difference in the long run. Aside from that emergency fund, the rest of your money should always be in higher-yielding accounts.
Plan ahead to protect your wealth and assets
Don’t lose all of your money to a lawsuit, a large medical bill or bankruptcy. Not a lot people consider protecting their assets as part of the financial freedom formula. But not properly protecting yourself could cause a major setback.
The best way to protect any assets that you have is to do the following:
Have an insurance plan that covers at least major medical:
A major illness or surgery can decimate your finances if you don’t have the right medical insurance. Have a plan that covers at least the big stuff. If you’re not sure which plan will suit you and your family best, consider using an insurance broker, who can compare plans and prices from various companies for you.
Create an LLC or C Corp:
If you have a business, create an LLC or C corporation as soon as possible and put your assets into the name of your corporation. (An attorney or a site like legalzoom.com or nolo.com can help you with this.) This is what a lot of the wealthy do.
I know a couple who own several businesses and they transferred the titles of their cars to one of the businesses, the title to their house to another and so on. These businesses were then put under one umbrella corporation. Basically, if someone were to try to sue them, it would very difficult for them to touch this couple’s assets.
Take action like an adult so you can sleep like a baby
These four elements of personal finance can do much more than explode your net worth—they can give you piece of mind because you’ll have the income, savings, investments and protections you need. I hope you’ll take all four of them—if you aren’t already.
If you’ve already been doing some of these steps, which ones have you been doing and how has it impacted your life? Please email me at team@bloomingwealth and let me know. I would love to hear from you!
In the meantime, try implementing the rest of the four strategies that you may not be doing. I’m sure with some time, it will greatly increase your net worth. Just remember, getting rich requires hard work and a dose of patience. It will take time—but be totally worth it:)