Sorry. I am not here to give you the secret get-rich-quick scheme for which we have all been hoping.
The term “effortlessly” is subjective and relative, as we all know. If you have learned anything about money, it’s that it takes work to make it. No one ever gets rich just sitting on their couches with welfare or unemployment checks.
While every method of building wealth takes effort, time, sacrifice and discipline, there are some ways on how to create wealth that take less effort than others.
You might have to invest either money or time (or both) initially in some of these areas, but what I will offer you today are some tips about how to make your money grow easily without having to work overtime or take on two or three jobs.
It is possible to become a millionaire simply by working and utilizing these tips. You just need to have the discipline and desire.
Let’s take a look at these 6 tips to easily create wealth.
Get out (and stay out!) of debt
There may be people who have utilized and leveraged debt into successful ventures over the years, but very few of the wealthiest individuals will ever say that having and keeping debt is the secret to wealth.
Debt is like a hole you dig. The more debt you get into, the deeper the hole you dig and thus the harder you have to work to get out of that hole. And the interest on that debt makes you fall further into the hole even if you’re not shoveling.
You can’t climb the mountain if you keep staying in the valley.
The less money you have going to banks and credit-card companies, the more money you have to build your wealth, not the credit card companies.
Saving money each month
It is one thing to be out of debt, but it’s something else to spend all the money you have every month. If you are living wisely and don’t have any debt payments, you should have money left at the end of the month.
If you keep that and don’t decide to “splurge” on your windfall, saving and investing the money can present some passive income for you over time that can help you build wealth.
Oh sure, it’s OK once you have your car loan and credit card balances paid you can loosen your budget belt a little bit to have more fun money. But don’t go overboard so it looks like you still have debt payments.
I’ve seen this happen too many times where people pay off debt and don’t know what to do with the money they were using to pay off their debt. Many times they waste this money on something else.
If you feel you might fall into this trap, instead of saving at month end, save first. When you get paid, immediately transfer an amount of money into a savings account. Or better yet, automate the process of saving money completely.
The money you save can work very hard for you if you allow it to do so.
It doesn’t take much work to come up with some money to invest, especially once you are out of debt. You could save 25% of your “leftover” money and put it in a savings account for emergencies or a future big purchase like a family vacation, and the remaining 75% of it can go into investing.
Where should you invest your money to help you get wealthy? Investing in just about anything will work. Real estate, commodities, bonds, stocks, mutual funds and ETF’s are all options. But for most investors, sticking with the stock market basics is the best option.
Going this route isn’t as risky and you can get started with very little money.
Also how you invest will depend largely on your risk tolerance and your time horizon, but being invested will produce a long-term gain for you.
To get wealthy does not take just a one-time, hit-the-lottery plan. When we say be debt free, we don’t mean just for a short time. We mean all the time. When we say save money, we mean every month. When we say invest, we mean every month. And don’t ever stop, even if the market tanks.
It’s all about being disciplined, which doesn’t have to take a lot of effort. Many times you can set up an automatic withdrawal out of your account on the same day every month or every quarter, so you never have to think about it or worry about missing an opportunity to pay yourself first or investing your money.
Don’t show off
You might think that those people who drive around in the newest BMW are rich, but if you want to be truly wealthy, you don’t buy new. It is well known that Warren Buffett, the multi-billionaire, drove his old truck to and from work for years.
He didn’t live in a mansion on a large, well-groomed property. He was living in a modest home. You get wealthy when your money is behind the scenes and not in new cars or boats or houses too big for your family.
Live within your means also applies to other outward appearances. Don’t buy designer clothes simply because of the name on the tag. Don’t get that special suite at the most expensive hotel on your vacation.
This isn’t to say you can never splurge on things. But if you make it a point to live within your means, you will find you have a lot more money to put towards getting yourself out of debt and saving for your future.
And this leftover money will go to work for you and grow into larger sums simply by saving and investing it.
Monetize a skill or hobby
When you look over the annual Forbes 400 list, you know what you will find? Not a single person getting wealthy as an employee. Most people might have started out that way, but no one got wealthy working for someone else. They all worked for themselves by building a business or multiple businesses.
Now, I know that building a business is not easy work, but if you put in the time and effort in the first few years and get it growing to the point that you have to hire people, that’s where your passive income comes from.
When you can hire people to do the work and people to manage the workers, you can be more hands off and still enjoy a steady income.
But what if you don’t want to grow a business to this size? You can still start your own business and earn a nice income. You just won’t have the option of making it as passive as the example above.
Think of it this way. If you can find something you love to do and figure out a way to make some money doing it, it will never feel like work to you. And as you make money from this venture, you can save and invest your profits to grow your wealth.
You might even be able to achieve financial independence going this route.
Here is a great example of how this plays out. A few years ago I started a website on the side. After a few years, it was earning close to $10,000 in profits annually. I never budgeted for this money. I simply invested it into tax-deferred retirement plans.
At the same time, I kept working my regular 9-to-5 job and I lived off this income. I also made sure to save and invest a portion of this money too.
Fast forward 5 years and the money I earned and invested from my website alone has grown to close to $70,000.
This is money I would not have if I didn’t start my own side business.
The bottom line is creating additional income by starting a business is a great way to build your wealth. You can decide how big you want to grow it, and as a result, how much income you earn. You also get to take advantage of various tax deductions too, saving you even more money.
OK, to be fair, some of this is not effortless. Building wealth takes time and effort. But once you get established in using your money to your advantage and you remain consistent and disciplined, your money will work for you and you will find over time your wealth growing faster thanks to compounding.
With the right dedication and initial investment, it’s not hard to convert $25,000 into more than a million dollars pretty effortlessly.