Fastest way to become rich
Fastest Ways To Become Rich | Here’s 5 Ways | The problem with the idea of getting “rich,” though is that it takes a lot of time and effort. Get-rich-quick schemes are almost always nothing but a way to prey on those who are trying to earn more money while struggling financially. Unless you are born into a wealthy family and a large inheritance is passed to you, you will likely have to become rich through a combination of hard work and financial diligence. Here are five ways experts advise on how to become rich:
- Avoid or pay down debt
- Spend intentionally and minimize debt
- Invest in a diversified portfolio
- Work on your career
- Start a side hustle
Fastest Ways To Become Rich | Avoid or pay down debt
Debt, particularly when it carries high-interest rates, may not always be unfavorable, but it is generally advisable to keep it to a minimum. For example, student loans can be advantageous if they do not have excessive principal amounts or high-interest rates and contribute to your pursuit of a financially rewarding career.
Robert Johnson, the chairman and CEO of Economic Index Associates, holds a different perspective, asserting that moderate student loan debt should be considered “good debt.” He contends that student loans have received an undeservedly negative reputation.
However, the key lies in how you utilize them. Student loans can become burdensome if the financial numbers are not in your favor. Johnson acknowledges that the system has been misused, with some students accumulating substantial debt for degrees that do not offer sufficient earning potential to repay that debt.
Furthermore, Johnson strongly emphasizes that credit card debt is consistently disadvantageous and should be prioritized over student loans. Ariel Acuña, the founder of the independent wealth management firm LTG Capital LLC, advises allocating at least 20% of your income to address any existing debt obligations.
Fastest Ways To Become Rich | Spend intentionally and minimize debt
If your aim is to amass wealth, it’s crucial to curtail your expenses and exercise greater deliberation in your spending habits. This is the second step, but it should often be one of the first actions you take, as it directly contributes to saving money. Practicing thoughtful spending and economizing necessitates the establishment of a budget.
By doing so, you can meticulously monitor your expenditures, discerning precisely how much you spend and where those funds are allocated. Ariel Acuña recommends crafting a well-prioritized checklist dictating how you intend to allocate your earnings. This checklist should encompass debt reduction, savings, discretionary spending, emergency funds, and more.
Your primary objective should be to reduce costs to the fullest extent possible, enabling you to divert those resources toward the accumulation of wealth. Jeff Burrow, the president and lead advisor at Sierra Ocean, suggests vigorously seeking out methods to curtail your lifestyle expenses and saving a quarter of your income.
Fastest Ways To Become Rich | Invest in a Diversified Portfolio
While there are limits to how much you can put into a 401(k) or IRA, those limits are high enough that many people are not able to reach them. And if you do, you can always invest more in a taxable brokerage account. Thus, if you want to become rich, you should invest as much as you can — there is no upper limit to that amount.
There are many different investment strategies, but most experts recommend putting most of your money in the stock market to get rich. Some recommend a smaller portion of real estate or even speculative investments. Burrow recommends a portfolio of 65% stocks, 25% real estate, and 10% speculative asset of choice.
You will want to invest that money in a tax-advantaged account such as a 401(k) or IRA first. That will help you minimize your tax bill and thus increase your returns over time. If you manage to max out all tax-advantaged accounts, you can move to a brokerage account.
Fastest Ways To Become Rich | Work On Your Career
There is no substitute for higher income. As they say, there is only so much you can cut in terms of expenses, but there is no limit to how much your income can increase, at least in theory. “Ensure that as you advance in your career/business/main occupation, you always save more than you spend as you earn raises and increase your gross income,” Burrow said. “Lifestyle cost creep will absolutely wreck a plan to get rich as quickly as possible.”
Of course, increasing your income will be contingent upon the job you have. Those working hourly jobs, for example, may have minimal leverage to increase their income. But if it is possible for you to move up the corporate ladder, that can be a powerful way to become rich as you will be able to save and invest more.
Fastest Ways To Become Rich | Start a Side Hustle
The idea of a side gig or extra work is nothing new, but if you have some extra time and you can pick up some extra work for a few hours a week, that can be a powerful way to increase your income. Gig economy work such as Uber and TaskRabbit make it easy to find flexible work. And there is no shortage of lists of types of side hustles to be found online.
Finding a side hustle is sometimes easier said than done, but this can be extra money that you can continue to invest further. “Immediately go try and find two to three side hustles that can boost your take-home income. Save as much of that as you can,” Burrow said.
