Building riches in a short amount of time can seem impossible, especially if you don’t come from a wealthy family. However, making the proper decisions might have a huge impact on your chances. All it takes is a little planning, discipline, and risk-taking.
Here are six strategies for boosting your financial performance in as short as five years.
Invest, Invest, and Invest Some More
Investing is the best method to enhance your wealth, according to money guru Ramit Sethi, who told CNBC earlier this year. “Invest a percentage of your money automatically every year and increase that amount by 1.
“We frequently imagine that wealthy people have access to secret investments via which they acquire a fortune. Listen, I have access to those investments, and I can tell you right now that they rarely outperform a standard S&P index fund.”
Always bargain for a higher salary.
Getting paid what you’re worth, whether that means negotiating your current job or obtaining a higher-paying position, will always pay off. A greater salary increases your income immediately, which is the foundation of wealth creation. It enables you to save and invest more money, resulting in faster total financial growth.
When negotiating a higher wage, finance expert Skyler Fernandes, founder and general partner of VU Venture Partners, advises not focusing exclusively on the monetary figure. “Many employers offer non-monetary benefits like extra vacation days, flexible work hours or professional development opportunities.”
According to him, these benefits can have a major financial impact.
“For instance, additional time off can reduce your personal expenses,” he went on to say, “while professional development can lead to higher-paying positions in the future.”
Negotiating for a full compensation package that includes non-monetary advantages is a lesser-known approach for improving your overall wealth, according to him.
You can make a lot of money and still not get anywhere if you have a mountain of bad debt. Credit card debt with high interest rates will gradually jeopardise your financial ambitions.
To avoid falling into this trap, use the debt snowball or debt avalanche payback strategies. Because it’s easier to build wealth when you’re not dealing with high interest rates, paying off debt enables you to save and invest more of your income, reducing financial stress and improving your future financial success.
Maintain a Low Expense Level
If you don’t watch your expenditures, you can make a six-figure salary and still live paycheck to paycheck. Adopting a more modest way of life can lower financial risks, making you less sensitive to market swings, job loss, and other unforeseen events.
Fernandes emphasised that managing spending extends beyond making a budget.
“Conduct a thorough audit of your monthly subscriptions and recurring bills,” he continued, recommending that you discontinue services that you no longer use or require. “Many people pay for unused gym memberships, magazine subscriptions, or streaming services without realising it.” This audit can free up funds that you can put towards wealth-building activities.”
Maintain Your Budget
As mentioned in the preceding point, making more money isn’t enough; you also need to spend it intelligently. According to celebrity finance expert Dave Ramsey’s website, “no one ‘accidentally’ wins at anything, and you are no exception!” If you want to accumulate riches, you must plan for it. And that is precisely what a budget is: a written strategy for your money. You must get down at the beginning of each month and assign each dollar a task—and then stick to it.”
Start a Side Business
Increasing your income is one of the most effective ways to accumulate wealth quickly. Setting yourself up for success entails beginning to devote your skills and time to a side venture that will generate and build your money.
“The digital age has made entrepreneurship more accessible,” said personal financial expert and Compare Banks co-founder Percy Grunwald. “Having a side business can change everything by providing a second, possibly passive source of income.”
He believes that when the business grows, it has the potential to create large revenue, and that commercial income typically comes with tax benefits.
Always evaluate market demand when deciding where you can best apply your skills, talents, and capabilities. Consider what you are best known for, both personally and professionally. What is something that others frequently seek your assistance with? This will most likely help you narrow down your options.
Consider freelance opportunities such as writing or tutoring if you wish to market professional services. If you want to start a product-based business, you can create an ecommerce store. The goal is to invest in a side hustle that will assist you in meeting your five-year financial goal.
“Accumulating money quickly involves balancing maximising revenue with minimising expenses,” Grunwald explained. Researching business prospects, being cautious with expenditures, and obtaining a higher pay can all lead to faster financial growth.”