Creating wealth is not as much about earning as it is about saving what you earn. If someone is earning less it doesn’t mean that he cannot amass wealth. It depends on how much you are saving from your salary for a rainy day. Even though the times that we live in today are harsh economically, we can still manage to retire early if you are ready to compromise on some luxuries of life and saving on them. It will pay off eventually when you have a safety net of your savings in time of need. Saving more and investing smartly is the key to whole idea. Some tips for the same are given below.
It’s as simple as it sounds. You need to save as much as possible. Nobody can build wealth unless they save on their own expenditures. The lesser you spend the more you save to spend in future. It’s a lifestyle choice. Frugal living is the way to do it. It needs to be more of a trend to follow every time. You need to go that extra mile. If you are saving 10% every month try to make it a little more than that. Stretch your limits a little and you will notice that drop by drop you have filled your financial bucket. Increase the percentages and statistics by challenging to save more and more.
If the lifestyle suits you then you can challenge yourself to go to extremes. Traditionally people save ten percent of what they earn. But with frugal living and smart expenditure you can save up to seventy five percent.
Some people have the habit of spending what they earn before they even have a moment to blink their eyes. If such people are given the little extra for their performance and loyalties then all they think of is how to spend it. Bonuses and tax refunds never reach the bank accounts sometimes. You need to be smart and make use of the big amount to invest in short term or long term investment schemes. At least half the amount should be saved and invested properly.
It is always tempting when you have your pockets filled to go out and spend it. That’s human nature which does not have control. To keep a check on this you can have your account set on auto pilot and the bank will take the tough decision for you. It transfers money from your checking account to your savings account. You just need to decide on the percentage you want to save from your salary and that much amount will be deducted and put in your savings account.
You need to pay all your debts and stay out of them. The more you save the easier it will be to pay off debts. Open a brokerage account and set it to auto-investment so that even if you forget it is doing all the work for you. One more way to reduce expenditure and improve savings is to use your call till it’s unusable. You can save a lot of money on that new car. These are some of the tips you can use to make sure that slow but steady wins the race.