Did you know that 1% of the people on the planet own 50% of the world’s wealth? This isn’t by accident. The richest 1% come from different industries and different parts of the world. But they have expert wealth building strategies. Below, we have listed the top five strategies that will make you an expert wealth builder.
5 Wealth Builder Tips
- Multiple Sources of Income
Most wealthy people have multiple sources of income. However, you don’t need to be rich to have multiple sources of income. You can start today by supplementing your current income. One of the quickest ways to gain additional income is to become an authority on a subject. You can then teach that subject to others. For instance, if you are a landscaper, you can start a YouTube channel offering landscaping advice. That can lead to you selling an eBook and eventually selling your own landscaping products. The more sources of income you generate, the more wealth you can build.
- Seek Passive Income
Another wealth builder strategy is to generate passive sources of income. Passive income can include buying a multi-family home and collecting rent, selling an eBook, or selling an information product online. Passive income strategies usually require some amount of work up front. However, after you do this initial work, you can collect your passive income for many years.
- Park Your Money in a Low-Cost Index Fund
Did you know that the vast majority of investment experts don’t beat the S&P 500 index? Many people spend their entire lifetimes saving up their retirement nest egg only to lose it by speculating on high-flying stocks. If you want to be a true wealth builder, simply follow the advice of one of the world’s richest men – Warren Buffett. Mr. Buffett recommends that most people put their money in a low-cost index fund that mirrors the S&P 500. This allows your investment to track the market with a very small management cost.
- Save First. Spend the Rest.
No matter how much money you make, you can’t be a true wealth builder if you spend more than you make. Some of the wealthiest people in the world follow a strict strategy of saving a large part of their income and then spending the rest. This allows their saved money to grow. Starting with your next paycheck, set aside a certain percentage for your retirement account. Then live off of what you have left over. By following this strategy, you will ensure that you will build your wealth with every paycheck.
- Own Only Income Generating Assets. Lease the Rest
The Mercedes Benz S550 is one of the most expensive vehicles in the world. Some of the richest people on the planet drive this $100K car. However, you might be surprised to learn that the majority of these six figure Mercedes sedans are leased, not purchased. This is not because the drivers of these vehicles can’t afford them. It is because of something called “opportunity cost.” You see, rich people see cash as ammunition to buy income-generating businesses, so these wealthy individuals minimize their cost on things that do not generate income. Therefore, many rich people prefer to lease their high-end cars, homes and jets so they have the wealth to buy income-generating assets.
Putting It All Together
You can become an expert wealth builder by generating multiple sources of passive income, investing in a low-cost index fund, watching your spending, and leasing non-income generating assets. Follow the wealth building strategies of the rich and you will someday join them at the top of the wealth pyramid.
If you’re interested in seeing some of the top income generator ideas, click here.