Based on financial reporting, middle-income bracket earners, did not increase their wealth from 2010-2013, while the highest income bracket individuals did.
How are people who are already wealthy able to increase their wealth so much more than others in the same economic conditions?
There are a number of reasons for this, ranging from tax breaks to investment choices (stock market vs. the stagnant housing market), but ultimately they know more about how to gain wealth and keep it.
Here are some mindsets and strategies to change your personal wealth statistics in 2015.
Don’t Limit Yourself
Don’t let your current financial situation dictate your future. You have profound potential and opportunity to create wealth. Many of those who are in high-income brackets gained their wealth by using their ingenuity, and being willing to step out of their comfort zone, financially.
Living with a defeatist mentality will never get you the wealth increase you want. Instead, you have to adopt a strategy of looking at the possibilities in each financial situation you’re facing.
This could mean looking for a new position or new job that more adequately compensates you for your abilities instead of settling for something that gets you by, or taking up a side job, or marketing one of your business ideas. You never know where these opportunities might lead, so don’t limit yourself.
Get Out of Debt
While extensive credit masks the real wealth of many people we perceive to be high-income earners, the truly wealthy live with very little debt. This is because debt eats wealth.
One of the easiest, fastest ways you can improve your wealth is to pay off your debt as soon as possible. I recommend focusing on getting rid of your highest interest-rate debts first, since they’re costing you the most unnecessary spending.
Start with your smallest/highest interest rate debt first, and when you have that paid off, apply what you would have spent on that payment towards the next debt until your accounts are paid off. This can free up surprisingly large amounts of monthly income you can then apply to savings and investments.
Know Your Savings Options
Just as there are fad diets, there are fad savings and investment strategies. Stick to the basics when starting out, and you’ll be more sure of maintaining financial stability.
At the same time, don’t be afraid to educate yourself about new investments you don’t know much about, such as money market accounts, online savings accounts, retirement accounts, and the stock market.
Choose what works best with your income, needs for security and return, and financial goals, in general. Building wealth can start with even small investments when assisted by compound interest, and a healthy stock market.
Seek Council From Experts
Knowledge is one thing, but experience makes all the difference. Don’t be embarrassed to ask your wealthier friends and relatives how they’ve built their nest eggs, and observe how they handle their finances whenever possible. Find a wealth role-model and implement their habits, strategies, and advice.
Ask to take them out for coffee, or see what you can offer in return for picking their brain. A wealth role-model will be able to help you increase your success at a much faster rate than you can on your own.
As with any of your other New Year’s resolutions, make small baby-step goals to increase your wealth in 2015, and establish habits you can implement into your lifestyle this year and beyond.
Which one of these ideas can you implement this week? How are you going to overcome the financial statistics to build wealth this year?