The standard American family has a net worth of $121,700. It’s certainly not a lot considering the high cost of living throughout the country.
But the good news is this: it’s never too early to start building wealth.
In this short guide, we’ll cover the basics of how you can build wealth regardless of how much money you have or how old you are.
Save, Save, Save
To build wealth, you need to save money. So if you continuously spend every paycheck, you need a budget. Look at your monthly expenses and figure out where you can eliminate costs and cut down your spending.
Then, set a savings goal. Try to stick to your plan each month. You don’t have to be frugal, but regularly meeting your goal will keep you motivated.
You can automate your savings to help you stay on track. For example, you can set an amount to automatically transfer each month from your checking account to another account of your choosing.
This can be a high-yield savings account or retirement account.
As you save more money, you can begin investing.
One of the best ways to invest is by opening a retirement account through a brokerage like Schwab or Fidelity. Some of the most popular accounts to choose from are a traditional or Roth IRA (individual retirement account).
When you invest from a retirement account, you lower your taxable income. This means you’re saving money while growing your money.
Take advantage of your employer’s 401(k) match program if they offer it. Not taking advantage of the program may mean losing part of your compensation package. Think of the program as free money to put toward your wealth-building goal.
For those who don’t know how to invest or what to invest in, start with things you use daily. For instance, if you own an iPhone, Macbook Air, Apple TV, and Airpods, think about buying Apple stock (APPL).
But remember, stocks are only one way to invest. Over time, you will want to diversify your portfolio to see better gains and shield your wealth from economic downturns. Mutual funds and ETFs are other good options to consider.
Create a Wealth Building Plan
While investing is an excellent way to build wealth, you should consider hiring a wealth advisor to assist with your plan. Advisors have expansive knowledge of the best ways to build wealth, especially as markets ebb and flow.
You probably don’t need an advisor at the beginning stages of investing. But as your wealth grows and you take on more life responsibilities, having a financial planner assist you with meeting your goals is helpful.
You can visit rvwwealth.com to work with a financial advisor. They will help you create and implement a wealth-building strategy that works for you.
Build Wealth With These Tips
Now that you know how to build wealth, you can slowly begin to grow your accounts and save for the future. Even if you only have $100 to save each month, it’s worth using that money to build wealth rather than spend it on something you don’t need.
For more money-saving and investing tips, check out the Finance section above.