Do you want to be rich? It’s a simple question, but it causes almost everyone some discomfort. Some people feel helpless. They have no idea how to start. Others get angry. The question triggers all their frustrations about wealth and success issues. Only a few people will say “yes!”
But here’s the thing: You get to choose how much money will make you feel rich. For some people, it’s six figures. For others, it must be seven figures. If you have more than enough money to meet your needs and then some surplus money, it will have a great impact on your own life as well as that of other people.
Start your journey to wealth by learning how to manage your debt, how to save up for an emergency fund, and how to invest your money.
Manage Your Debt
A debt management plan is an excellent idea if your credit score is low because you have missed paying some bills on time. It will help you rebuild your credit because you will have a plan on how to pay your bills consistently every month and eventually pay off all your debts. Most debt management plans are similar. A debt management firm will negotiate with your creditors for you to cut your monthly expenses and increase the time you must pay off your debt.
Debt management firms may negotiate to reduce the total sum, reduce interest rates, or waive aside any late fees. They will create a schedule that you can afford to pay each month, and they will arrange a timeline of three to five years to have your debt paid off in full. Most creditors agree to these negotiations because it will save them the time, money, and hassle of reminding you to pay your debt. Now they have the comfort of knowing that if they are willing to compromise, you will pay them regularly.
Create an Emergency Fund
The future is unpredictable. Although you don’t know what will happen, you will be able to manage a crisis if you have a financial game plan in place.
Creating an emergency fund is strategizing a way to build up your savings account. You could save money by setting aside a portion of your income each month to meet a savings goal, organizing your finances so that you know how much money is flowing into and out of your life, and cutting your expenses so that you can save the money that you would have spent.
Invest Your Money
The only way to tip the income vs expense balance in your favor is to get your money to make money. Even if you have a good salary and can save a large portion of it, the value of money itself depreciates over time. In every economy, the cost of living goes up because of inflationary trends.
There are many ways to invest. You can play the stock market. You can trade commodities, options, or cryptocurrencies. You can flip real estate contracts. Or you could loan money in a peer-to-peer lending network. If you are a US citizen looking to invest in P2P lending, you can for example invest with Prosper or Lending Club. Foreign investors are not allowed to invest on these platforms and could instead take a look at Mintos.
Choose an investment vehicle that appeals to you and learn as much as you can about it. Then make small bets and learn from your mistakes. Once you feel you understand how a market works, you can increase the size of your investments to earn a higher return.
Aspiring to improve your financial situation will relieve you of all your money worries. Even if you think money is not important, you live in a society that thinks it matters. Without money, you cannot have a place to stay or food to eat. You will be miserable. If you improve your financial situation and get richer, you will improve your own life as well as help many people out. And, of course, the more money you make, the easier it will be to enhance the quality of your life and distribute your wealth.