How To Be Wealthy: The 2-Minute Guide

There are tons of books devoted to building wealth through various endeavors. If you could build wealth by reading books, then Americans would all be billionaires!

In order to become wealthy, you need to stop being a laborer and become a capitalist.

Laborers exchange time for money. Capitalists have investments that generate money for them.

It doesn’t matter if you’re a doctor, a lawyer, or a minimum-wage grocery-bagger – you’re stilling exchanging time for money. Unless you accumulate income-producing assets that replace your income, you’ll never become a capitalist, or achieve financial freedom.

So here’s the 2-minute guide that contains pretty much the gist of building wealth.

There are three basic things you need to do in order to be a financial success.

1. Spend less than you make 

Surprisingly, less than 60% of Americans implement this crucial step. Regardless of how much, or how little, you make, if you can’t afford to save even 10-15% of your income, you’ll never be wealthy.

Understand your needs vs wants. If you can cut down on your wants, you should be able to free up money to save. That brings us to step 2…

2. Invest your savings in a portfolio that includes equities

Only 75% of Americans who save their money actually invest it (so this is 45% of all Americans).

Investing in equities will ensure your money outpaces inflation in the long run. Of course, you should have a rainy-day fund for emergencies before you start investing.

3. Use low-cost index funds

Only 20% of Americans who save and invest use low-cost index funds – that’s a meager 9% of Americans who do all three!

Most people have neither the time, nor aptitude for picking individual stock. So instead of speculating in individual stocks, which can be very profitable, the average investor is better off investing via index funds.

A large majority of those who do all three of the above steps are very wealthy. You can be too if you follow their lead.

 

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