Every day, I work with clients around the country—musicians, entertainers, professional athletes, successful businesspeople—and one thing I always stress to them is wealth is a mindset and a lifestyle.
You can come into money quickly—a lot of people do that. But people who come into money without a plan lose that money as quickly as they made it. Just look at all the former athletes out there who go broke after retiring.
So, what is the real way to Build Wealth?
1 – Live below your means.
Your income is your number one wealth-building tool, no matter how much you make. If you’re living paycheck to paycheck and spending everything you make, then you’ll never get anywhere.
2 – Make a plan.
Write down a budget, each month, before the month begins. How long will it take you to get out of debt? How long will it take to save up a $1,000 emergency fund? Set deadlines and goals, and plan for results. Make sure what you’re doing with your money matches what it will take to reach your goals.
3 – Stop using credit cards.
It’s all about the cash, baby! Think green from now on. Think about how much you’re getting burned by credit card interest, and burn up those cards forever. Make interest work for you, instead of letting it get you into deeper debt.
4 – Build an emergency fund.
You want quick access to cash. Life is going to happen—the flat tire, the leaky roof, the busted HVAC unit—and you want to be prepared. With an emergency fund, you can pay cash for these setbacks, instead of throwing down a credit card. And, remember, this is an emergency fund. Don’t let your wants get in the way of your needs!
5 – Diversify.
When you get around to investing, understand that spreading your assets out and having the right allocation is extremely important. Make sure you find an investment professional that you can trust to guide you through the process and answer any of your questions without talking over your head. And, no matter what, don’t listen to Uncle Earl and your broke friends. Use a professional.
6 – Remember estate planning.
This one is so easy to forget, but it’s unbelievably important! Make sure you have a will in place, starting today! Get on it. This isn’t complicated, and it’s not expensive. You also want term life insurance coverage of 10 to 12 times your annual income.
Remember, building wealth is not something you can do from watching a 30 second infomercial. It takes time, patience, and understanding how to do things the right way.
Trust me, you can do this. Start the process and you’ll be amazed at how quickly you build momentum and take control of your money. This is the real way to build wealth!
By: Chris Hogan
Chris Hogan speaks all over the country at businesses, associations and colleges on money and leadership. He also conducts on-site training sessions for organizations of all sizes. As a former All-American college football player and business owner, Chris understands that leadership is essential for the success of any team. You can follow Chris Hogan on Twitter at @ChrisHogan360 or check him out here: daveramsey.com/speakers/Chris-HoganRead More Articles by Chris Hogan