7 Things You Need To Buy To Build Your Wealth
Building wealth is not something you can do overnight. It will require planning, action, and discipline. Money is meant to be spent, that’s a fact. The question is — what do you spend your money on? Are the things you buy on a daily, weekly, or monthly basis, assets or are they liabilities? Are they things you can afford or are they things you’re buying just to show off?
The type of things you spend your money on will define who you are financially, both in the long and short run. I’m sure everyone would love to have more money than they do presently, but are they buying the type of things that will ensure their wealth is built-up rather than depleted? Contrary to popular belief, building wealth has to do more with habits, and not how much money you earn. You could earn $5,000 a month, and after 6 months you may still not have as much money saved as a person who earns $2,000 per month. It all boils down to habits. Spending habits basically boils down to the things you buy, the quantity you buy, and how often you buy them and in this article, I will share with you 7 things you need to buy to build your wealth!
Number 1: A Used Car
For someone who wants to build up their wealth, buying a brand-new car may not be the best way to go. A brand-new car loses 10% of its value after the first month and 20% of its value within the first year of owning it.
Sure, owning a brand-new vehicle can be enticing but why would you want to throw away thousands of dollars just to have that luxury? In fact, the rich avoid this money wastage more often than you would expect and have figured out the optimal age of the car they should buy. The average millionaire drives a four-year-old car with at least 41,000 miles on it so they can avoid the high amount of upfront depreciation that a new car experiences.
As long as the used car you’re buying is in tip-top shape and can conveniently get you from point A to point B, then you’re good to go. Why spend $40,000 on a new car when you can spend $8,000 on a used one? Financial experts have asserted that buying a used car and using it for a long period will save you a lot of money down the line. The extra cash saved can be dedicated to other profitable ventures like starting a business or making extra contributions to your retirement account.
Number 2: Books
Learning from the experiences of several successful people and applying these experiences to your daily life is another way to build wealth and these experiences can be found in books. There are great books out there that can teach you about money management, saving, investing, purchasing stock, debt servicing and so on. The information contained in these books will open your eyes to see all the money mistakes you’ve been making and will offer advice on how you can thrive financially. The advantage of buying financial education books is that they are cheaper than taking courses and often times are more helpful as well. Another advantage of buying these types of books is that you are able to gather so much helpful information in so little time.
Number 3: The Right Stock
Buying the right stock is one of the best ways to build your wealth, not just in the short run, but in the long run as well. Keep in mind that I said “the right stock”. This means there’s a possibility you can invest in stock that won’t bring you any profit. A large possibility for that matter. When you buy stocks, you automatically become a part-owner of the company that’s selling. Besides an increase in value of shares that can come down the line, you will also be entitled to quarterly dividends.
Now, you might be skeptical about how lucrative stock investing can be but buying the right stock has turned many people into millionaires over the years. Let me give you a real-life example. Microsoft went public in 1986 and today, they are one of the biggest, most successful companies in the world. According to CNBC calculations, $10,000 worth of Microsoft shares in 1986 (the year they went public), is equivalent to $16,00,000 today. Now tell me buying the right stock isn’t an excellent way to build wealth!
Number 4: A Small House
Trust me, owning your own home beats paying rent, but still many people hamstring their ability to build wealth by buying the wrong home. A lot of people buy houses bigger than their needs require, assuming more debt and paying more interest than is required. And why do they do this? Because they want to show off and nothing shows off your wealth better than a mansion right?
If you’re a small family, why do you have to live in a mansion-like house? Even if you were a sizeable family, do you really need that many rooms? Does the yard have to be that big? Buying a big house will put unnecessary financial pressure on you and will hinder your ability to start a business, invest for retirement or simply save money.
Before buying any home, you need to consider how much you will have to pay in mortgage and interest and how long it will take before you pay it off. However, when calculating the true cost of home ownership, don’t forget that owning a home will require routine maintenance and renovations which can also be pricey. Luckily, the smaller the house you buy, the less these expenditures will be and the more cash you can keep for yourself. In short, conventional long-term expenses such as mortgages can hinder a person from building up wealth. It would be easier if you buy a small house so you can pay off your mortgage early, then concentrate on building up your business and wealth.
Number 5: Attention
Having a large followership means having more people aware of the goods and services you offer. Do you know what this means? It means one of the things you can buy to build your wealth is an attention!
Buying attention that you can use to grow a following is not as hard as it seems. There are different ways you can do this. The first way to do this is paying for social media ads. If you’ve got goods or services, and you’d like to build awareness for what you offer, then you could pay for Instagram, Facebook, and YouTube ads. When you pay for these ads, you can target your audience to fall within the bracket of age and location.
If you’re in Texas for instance, and members of your target audience are residents of that particular state, you can customize your social media ads to reach potential customers in that area. The more people around your region are aware of the goods and services you offer, the more customers or clients you can get for your business. Hence, the more profit you can make.
The second way you can buy an audience is to pay social media brand influencers to do the job for you. Brand influencers have a large followership, and they have the ability to convert traffic into sales. This is another great way to buy attention, it may cost a bit more than paying for the ads yourself, but it also means you can sit back and relax and let the influencers do the hard work for you. Another advantage of buying an audience via brand influencers is that the influencer’s followers already trust their judgement and opinions. This means if they tell their followers that a certain product or service is worth their money, they are more than likely to agree and patronize your business.
The third way you can buy an audience is by paying for conventional media advertisements. When I say conventional media, I’m talking about radio, TV, and newspaper ads.
Social media may have become popular over the years, but conventional media still remains a strong medium which you can use to make the general public aware of what you’re offering.
If the products and services you offer cater to the older folk, then conventional media adverts may be the best way to reach them. This is because the older generation aren’t so tech-savvy, so they’d rather get their information from conventional media. Lastly, you can buy an audience by printing flyers and posters. You can also pay for billboards. All these methods are built to gain attention and grow your following!
Number 6: Real Estate
This is one of the most popular long-term investments in the world and it rarely disappoints. When you have that extra cash to spare, you should consider buying some property as it can help you build wealth in both and short and long term.
Now, owning real estate can build your wealth in multiple ways but let me quickly run through a few. The first is through earning consistent rental income. A lot of people in the world live in rented apartments, so buying property for the sake of rental is a no-brainer. However, earning rental income isn’t limited to residential tenants. You could also rent your space to businesses. Businesses tend to pay higher in rent than individuals and they may be a better option in terms of rental longevity if you have adequate space.
The second way you can build wealth through real estate is by increasing equity. Equity is your amount of ownership in a property and as you pay down your mortgage, the equity you have in your home or property rises. For instance, let’s say you put down 25% on your last rental property, and with mortgage repayments you’re at around 33% equity, the 8% difference of the property value will be paid by rents, thereby increasing your net worth every month.
The third way to make money with real estate is by taking advantage of undervalued properties. By buying low and selling high, there is a ton of money to be made with real estate. Now, you may be wondering how you can acquire real estate with profit potential and some of the ways include dealing with foreclosures, quick sales, negotiating lower prices and identifying sellers who no longer have interest in the property.
But it isn’t enough just to buy property at great prices, you must also hold it as it appreciates or sell it to capitalize on its value. You see, over the long-term, properties always appreciate. How much or how little it appreciates depends on the location, market trends etc. however like stocks, the only direction real estate will go is up. Then, when you have achieved the return you desire, you can sell the property and cash in on a lump sum or rent it out if recurring income is what you desire.
Number 7: People’s Services
Truthfully, it is hard to build wealth all by yourself, especially when you plan to do so by running a business. Simply put, you will need the help of others. No one has all the skills it requires to become successful which means you are going to have to hire some capable hands to work with you. This means you need to buy their services.
The importance of staff (or a team) cannot be overstated. The quality of your staff plays a massive role in how well your business will do. Your staff may be full time or part time, depending on the set up of your business. When you leverage the expertise of others, you will be super to have a better end product and will achieve your financial goals in a much shorter time!
CONTRIBUTED BY Adam Del Duca
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