Accumulating Wealth: A Money Building Guide That Actually Works | Wildchildretire

Finally got your financial reigns in order and want to know what this whole accumulating wealth thing is all about?

Here, you’ll get a step-by-step guide on how you can easily build lasting wealth for yourself and your family.

In fact, these steps to wealth have allowed my wife and me to go from broke to first-generation millionaires. All before the age of 37.

So if you’re curious about how to build a wealth plan, which budget apps to use, and how using cash can only help you build a fortune, check out the awesome read below!

Let’s go.

What Is Wealth Accumulation?

To accumulate wealth, you need to have an excess cash flow coming in each month. This extra money can then be used to invest in assets that will appreciate over time, such as real estate or stocks. The goal is to build up a large enough nest egg so that you can live off of the interest and dividends earned from your investments.

Why Is Wealth-Building Important?

Building wealth is important because it provides you with financial independence and security. It allows you to weather unexpected life events, such as job loss or medical emergencies, without having to rely on others for support. It also allows you to retire early and enjoy your golden years without worry.

What Are The Key Principles In Building Wealth?

1. Finetune Your Wealth Number

Knowing your wealth number is the first and most important principle in building wealth. This is the money you need to save to comfortably retire. Once you know your number, you can develop a plan to save and invest accordingly.

For example, let’s say you want to retire with $5 million by age 50. You’ll need to save and invest a certain amount each month to reach this goal.

You can use a retirement calculator to estimate how much you need to save. But remember, your wealth number is unique to you and will depend on factors like your desired lifestyle in retirement and how long you expect to live.

Another good tip is to use a money vision board. For visual learners, this is a great way to stay on track.

2. Budget

The second key principle in building wealth is to budget for it. Just like with any other financial goal or investor’s goal, you need to be intentional about setting aside money each month to reach your target number.

One way to do this is to set up separate savings accounts for your wealth-building efforts. This will help you stay on track and avoid dipping into your nest egg for other purposes.

Another way to budget for wealth accumulation is to use the 50/30/20 rule. This rule suggests that you allocate 50% of your income towards living expenses, 30% towards savings and investments, and 20% towards debt repayment.

While this may not be possible for everyone, it’s a good general guideline.

And suppose you want to make things even easier. In that case, you can use a budget app like Personal Capital to track your spending and automatically funnel money into your savings and investment accounts.

3. Aim To Save At least 50% of Your Income

This is crucial if you want to become wealthy. It may seem daunting, but if you break it down into smaller chunks, it’s definitely doable.

For example, let’s say you make $3,000 per month. If you save 50% of your income, that’s $1,500 per month or $18,000 per year.

While this may seem like a lot, plenty of frugal living tips can help you cut expenses and free up cash to save. For example, you could:

• Cut back on eating out
• Downgrade your cable package
• Get rid of your gym membership
• Shop at discount stores
• Carpool or use public transportation

The Acorns app is another excellent way to save 50% of your income automatically. Acorns round up your purchases to the nearest dollar and invest the spare change into a portfolio of ETFs.

For example, let’s say you buy a coffee for $3.50. Acorns will round up the purchase to $4 and invest the extra $.50.

Awesome sauce all around. 😁

4. Automate Your Savings

The fourth principle for building wealth is to automate your savings. This means automatically transferring your checking account to your savings and investment accounts each month.

This is important because it takes the emotion out of saving. It’s much easier to save money every month when you don’t have to think about it.

You can set up automatic transfers through your bank’s online portal or using a tool like Mint. Mint is a free personal finance app that allows you to track your spending, create a budget, and set up automatic transfers. Mint also offers other features like credit scores and bill pay.

5. Save For Retirement (401 K)

The fifth key principle in building wealth is to save for retirement. This may seem obvious, but it’s important to mention because saving for retirement is one of the best ways to build wealth.

There are two main types of retirement accounts: traditional and roth.

With a traditional account, you contribute pre-tax dollars, and the money grows tax-deferred. This means you don’t pay taxes on the account until you withdraw the money in retirement.

With a roth account, you contribute after-tax dollars, and the money grows tax-free. This means you never have to pay taxes on the account, even in retirement.

For example, if your company offers the choice to invest in the S&P500 and invest $500 a month in the roth account for 40 years, you could have over $4 million by the time you retire.

The best way to save for retirement is to start early and contribute as much as possible. If you’re already in your 40s or 50s, it’s not too late to start – but you’ll have to compensate for the lost time by contributing more.

6. Create An Emergency Fund

The sixth principle for building wealth is to create an emergency fund. This is an account that you set up specifically for unexpected expenses. For example, if you lose your job or have a medical emergency, you can tap into your emergency fund to cover the costs.

Ideally, you should aim to have at least six months of living expenses saved in your emergency fund. This may seem like a lot, but it’s essential to have a cushion in tough times.

Here are some ways you could save for an emergency fund:

• Set up a separate savings account specifically for your emergency fund.
• Automate your savings, so you’re automatically transferring money into your emergency fund each month.
• Cut back on expenses so you can free up cash to save.
• The best way to build your emergency fund is to start small and gradually increase your contributions over time. Start with $50 per month, then increase it by $10 each month until you’re saving $250 per month. Once you have $1,000 saved, you can start decreasing your contributions to $50 per month.

These steps to building wealth will help you build up your emergency fund without putting too much strain on your budget.

7. Use Cash Only

It’s proven that using cash only helps you spend less and save more.

When you use cash, you’re more mindful of your spending because you can physically see the money leaving your hands. This makes it less likely that you’ll make impulse purchases or buy things you don’t need.

Plus, using cash only forces you to stick to your budget. If you only have $100 in cash to spend for the week, you’re not going to blow it all on a new outfit or a night out.

If you’re serious about saving money and building wealth, using cash only is a great way to stay on track.

8. Get Out of Debt

Another one of the keys to building wealth is to get out of debt. This may seem obvious, but it’s crucial to mention because debt can drag you down.

Debt can be overwhelming, making it hard to save money or invest in your future. Plus, the interest you’re paying on your debt is money that could be going into your pocket.

80% or 8 in 10 Americans have over $38,000 in consumer debt. That’s nuts! If you’re in debt, you must get out as soon as possible. The longer you stay in debt, the more money you’ll end up paying in interest. There are a few different ways you can get out of debt:

• You could try the debt snowball method, where you focus on paying off your smallest debt first. Once that’s paid off, you move on to the next one, and so on.
• Then there is the debt avalanche method, where you first focus on paying off your debt with the highest interest rate. This will save you money in the long run, but it may be harder to stay motivated since it will take longer to see results.
• Or you could use Quickens debt reduction planner. Quicken’s Debt Reduction Plan makes it simple to figure out which debts you should favor based on their interest rates. Quicken has many features that make it easy to manage your finances, including an interest rate calculator and payment plan creator. The program will work out what you need to do to pay off debts with the highest cost while ensuring other bills are covered too!

Now go knock out your debt so you can build some wealth.

9. Invest

If you want to build wealth, you need to invest.

In a survey by Dave Ramsey of 10,0000 participants, 80% of millionaires invested in the stock market.

There are many different ways to invest, but one of the easiest ways is to use a Robinhood account. With Robinhood, you can buy and sell stocks like Apple, Amazon, or even the S&P 500 from the ease of your cell phone.

Plus, there is no commission fee when you make a trade. This means you get to keep more of your money, which is essential when trying to build wealth.

If you’re unsure how to start investing, plenty of resources are available to help you out. Check out books like “The Intelligent Investor” by Benjamin Graham or “Rich Dad Poor Dad” by Robert Kiyosaki.

There are also a ton of online resources that can help you get started with investing. For example, websites like The Motley Fool and Investopedia offer articles, videos, and courses on how to invest.

So what are you waiting for? Start investing today so you can begin building your wealth!

10. Learn, Learn, and Learn Again

One of the best ways to build wealth is to invest in yourself. This means continuously learning new skills and building your knowledge to earn more money.

The great thing about investing in yourself is that there are endless opportunities. You can take find online resources, read books, or listen to podcasts like:

• The Dave Ramsey Show
• The Richest Man in Babylon
• Vanguard

You can also find free resources online to help you learn new skills.

One website that offers a great way to learn new skills is Skillshare. Skillshare is an online learning medium with over 25,000 design, business, and technology classes.

Most of the Skillshare classes are project-based, meaning you can immediately put your new skills to use. And since the courses are online, you can learn at your own pace and schedule.

So what are you waiting for? Start learning today so you can begin building your wealth!

11. Be Kind To Yourself and Others

Total health maintenance (Mind, Body, and Soul) is a key component of getting and staying wealthy.

Taking care of your health is essential so you can live a long and prosperous life. Proper diet, exercising, and getting plenty of sleep are crucial factors in maintaining your health.

You should also take care of your mental and emotional health. This means taking time for yourself, managing stress, and surrounding yourself with positive people.

It is also important to be kind to others. This means respecting others, being generous, and creating positive relationships. When you are kind to others, they are likelier to be kind to you.

Some good online resources to help you with total health maintenance are:

• Mind: Headspace, Calm 
• Body: MyFitnessPal, Fitbit 
• Soul: Happify, Tiny Buddha

Do yourself and the world a favor. Be kind to yourself, be kind to others, and go do awesome things. 😊

FAQ

How do you accumulate wealth quickly?

Some of the best ways to accumulate wealth quickly are:

• Invest in yourself by continuously learning new skills and building your knowledge.
• Invest in stocks and other assets to grow your money.
• Be kind to yourself and others. This includes taking care of your health, managing stress, and being generous.

How do you retain wealth?

There are a few key things you can do to retain wealth:

• Diversify your investments, so you’re not putting all your eggs in one basket.
• Create multiple streams of income, so you’re not relying on just one source of income.
• Be mindful of your spending and ensure you’re living within your means.

What increases your wealth?

There are a few things that can help increase your wealth:

• Saving: You need to start saving your money as early as possible. The earlier you start, the more time your money has to grow. Try to put away at least 50% of your income each month.
• Investing: Investing is a great way to make your money work for you. When investing, it’s like taking a step forward in life and putting funds into something with potential growth – whether that be equities or bonds; real estate investments such as vacation houses around town which could help expand business opportunities through tourism marketing campaigns (think: Airbnb); other forms of investment including art pieces sold at auctions online among.
• Stay disciplined: It’s important to stay disciplined regarding your finances. This means creating and sticking to a budget and being mindful of your spending.

How do I become a millionaire in 10 years?

Some of the best ways to become a millionaire in 10 years are:

• Invest in high-quality stocks: Many millionaires were made during the bull markets of the 1980s and 1990s by investing in stocks. To achieve millionaire status in 10 years, you must find suitable investments and stick with them.
• Start your own business: Another way to become a millionaire is to start your own business. This is how many of the world’s wealthiest people have made their money.
• Invest in real estate: Another way to build wealth is to invest in real estate. This can be done by buying property and renting it out or by flipping properties.

What is the most important key to building wealth?

The most important key to building wealth is to save your money. You need to have a plan and a budget to ensure you save as much money as possible.

Summary

So there you have it, wealth accumulation in a nutshell. Follow these wealth-building techniques, and you will be well on building an impressive nest egg for yourself and your loved ones. Remember, it’s never too late to start – even if you are just getting started with budgeting and investing today, you are already ahead of the game! So now go forth and accumulate wealth!

What tip will you use today?

Will you use Quicken to dig yourself out of debt?

Or will you use Personal Capital to help with accumulating wealth by tracking your finances?