Start your wealth-building journey by following these three habits
Wealth habit #1: Keep it simple - Curb your spending habits
This is a very common mistake people make – they spend more than they earn. Or even more common, they buy things they don’t need.
I remember two years ago we received an email from a reader who asked us what he could do to curb his spending. He also attached a breakdown of what he spent every month.
Long story short, what shocked us the most was he spent more than half of his monthly income on “entertainment”.
Now if you’re serious about growing your money, you can’t buy unnecessary items.
What you need to do is look at your monthly salary and draw up a financial plan and allocate your money to the essentials, only.
Then use what’s left and put it in a savings tool like a fixed-deposit account where you’ll earn decent interest.
Once you have enough money, you can “supercharge” it by investing.
Wealth habit #2: Keep it cheap - Invest in low-risk investments with safe returns
A good way to start investing is to use a diversified, low-cost exchange-traded fund (ETF).
You can track South Africa’s 40 biggest companies by investing in the RMB Top40 or Satrix Top40. Or buy the JSE top dividend-payers by investing in the DivTrax.
ETFs are just one safe way to increase your wealth because the fees aren’t expensive and you’ll receive a relatively consistent performance.
It’s also a safe way to invest in shares, then just buying individual listed companies.
But more importantly, you don’t need a lot of money to invest in an ETF – you can start with as little as R100 using EasyEquities.
Wealth habit #3: Keep at it – Build on the wealth you already have
Bill Bonner says, “As you earn more money, then… and only then… can you afford to splash out on"
Once you’ve built up a good amount of money from low-cost investments like ETFs, you can start delving into the more sophisticated and riskier investments.
For example, you could put your money to work in individual JSE listed or offshore companies. You could build up a portfolio of investments, like gold, preference shares, bonds or adding property
for income streams.
These types of investments will boost your wealth.
“Keeping at it” also involves…
Continuously take note of your spending habits (saving more)
Staying invested even through the tough times
Follow these three wealth habits to kick-start your wealth building journey today.
Until next time,
Always remember, knowledge brings you wealth,