10 Realistic means to Get Rich at a Young Age
At a young age, many are fortunate to have a family to provide for them financially, emotionally, psychologically and physically. Youth who find themselves depending solely on the family for financial security tend not to be bothered by how to financially secure themselves to meet future goals.
Being young means having lots of life ahead of you to plan for your future. In planning a future, there is the need to think about your finances. It’s vital to shun the belief that “your parents will always provide to secure your future.”
Yes! Your parent will provide but that does not guarantee a secured financial future. Irrespective of the financial situation of your family, you have to top it up by acting smart. The teen years is the age you need to be proactive to obtain financial breakthrough and living a dream life in the future since around that time no family member depends on you or there’s no financial pressure on you.
In achieving your dream life, improving your finances is key. Below are the ten realistic ways to get rich at a young age.
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1. Know your Goals
Knowing one’s goals make one aware of who he or she is and means to get that goals actualised. Let’s say if you want to be an investor or own businesses, you will know you will have to save to meet that objective in life.
2. Have a can do spirit
Believing in yourself is key to know you have the can do spirit. Therefore, before investing in businesses and other relevant things, one needs to first invest in him or herself. A study by BBVA research found that confidence affects financial behaviour and success. According to this study, individuals with higher confidence levels score higher on tests for financial literacy.
To build a stable financial status, have that can do spirit, confidence and self actualisation. In doing so focus on your ability what one can monetise from his or her skills.
It is worth noting that in business and personal life, self-confidence is the first step in taking massive action. Believe in yourself, your abilities, skills, and passions to leap into entrepreneurship or any other aspiration. confidence is the anchor of exceptional leadership. It helps to manage and inspire others with assurance and direction. Learning to believe in oneself is important to creating a life which one desire.
3. Saving is paramount
Any money that you make as a youth, ensure to put aside some. If it is a salary pay yourself first by putting aside some of the income for personal savings to have something for investment. The purpose of paying oneself first is to build up a nest to secure one’s future while creating a safety net for a financial crisis. Many experience a large amount of stress due to the habit of over spending without saving.
Accumulating a certain amount for times of need gives peace of mind. This can lead to a stress-free life knowing that you will not have to struggle if things take an unexpected route. By saving now, you can buy a house, accumulate funds for your retirement, or purchase a vehicle of your dream. You can secure your future, your child’s education, indulge in the best things that life offers, and live a very fulfilling life. Having enough funds eliminates almost half of the problems that one can encounter lifelong.
4. Budget your income or allocate your money
People have been making a common mistake from time to time without budgeting. If you don’t budget your money wisely, it will take a toll on your future. It would help if you don’t spend BEFORE saving; instead, you only spend AFTER saving.
A 50-30-20 rule is the best money advice that one could ever get to cure the bad habit of hitting a bar or buying a purse one has been eyeing after getting a bank alert on a pay day. The 50-30-20 rule works like this:
50per cent of your salary goes to things you must have or need to spend on like rent, electricity, food, taxes among others.
30per cent goes to something you want to buy (that new iPhone, eating out, relaxing, and watching a movie).
While 20per cent goes to savings (bank savings, insurance, college funds among others).
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The best part of the 50-30-20 rule acknowledges that money is for spending. It teaches one not to spend too much on things one wants but doesn’t need. It allows one to save a reasonable portion of 20per cent and not be a killjoy since one can see that the 30per cent in the middle is meant for the things that one wants. But if you overspend, this will eat up the 20per cent that should have been going to savings. It is important to allocate first the 20per cent then spend only what is left after saving.
5. Make financial investments
Allocating a 20per cent savings means you can now make any investment you want. This could help increase your finances to secure your future. It could be bank investment or business investment that could make you take in money.
6. Have self control when holding money
There’s something called delayed gratification. It involves the ability to wait to get what one wants in getting better reward. This ability helps to resist temptation and stick to one’s goals. It is often called willpower or self-control, and delaying gratification is often seen as a central part of this behaviour. This requires one to adjust. You put off what you want now to perhaps something else. For example, if one can put off switching to a new phone that costs $1,500 and may be utilise the money to start on an index fund with a minimum investment of only $1,000, this can eventually make the money grow.
7. Cut down monthly expenses
Look at your mandatory and optional expenses. Weigh what the priorities are and check what costs can be lessen to leverage more money for savings and investments.
Try to figure out the expenses which can be cut out to save money. There are lots who are subscribed to some podcasts which might not be necessary. Call the bank and cancel them. You’d be surprised with the amount of money you can save after doing so. If you miss them in the future, it’ would be easier to resubscribe than pay them monthly without even using them.
8. Find a side job
If your job doesn’t take much of your time, you can find another job to add to it to make extra money. You can even become a house teacher for children within your neighbourhood during spare time and on weekends.
Having these habits could improve your finances, mindset and decision making.
9. Set an Emergency Fund Target
As a youth, you must set an emergency fund target so that you are not moved by surprise when the waves of life roll. Emergency funds are just part of life. It’s always a good idea to consistently contribute towards long-term savings for times of emergency. This could be unexpected expenses, bills or you know, pandemics.
Consistency is the key here. Setting specific and time-bound targets for your savings is the best way to slowly build up your emergency funds and will help you feel more financially secure overall.
Read More: Andrea Brillantes charges young entrepreneurs to research before setting up a business
10. Have a wealth decision-making skills
How long does it usually take for you to decide before you make a purchase? Have you ever thought about buying a house for your future? Strong decision-making skills are essential in building wealth. It helps you weigh options and make informed choices regarding financial situations like how and when to save and spend, comparing costs before a big purchase, and planning for retirement or other long-term savings.
Small decisions like wasting your money on small, frequent purchases negatively affect your finances. And whenever you make a decision, ask yourself, can I afford and sustain this for the following years? Or will I be in massive debt? What costs can I cut first before buying a house? Your big decisions have to synchronise with your small decisions.
The above ten realistic ways will help you to become rich at a young age. Just know that wealth creation is built over time so as early as now, it is essential to realise that there’s no fast way to success, and there are a lot of struggles along the way.
However, it’s also vital to add discipline to the equation. Without the discipline to invest and save, you are most likely to go off track. But that doesn’t mean you should give up. You have goals for a reason. Reflect on that reason when you feel like giving up. If you fail along the line, keep reflecting on your goals because there is always tomorrow to try again.
