Life would be a whole lot easier if someone would just Venmo or Chase Quickpay us $1 million, but unfortunately, the chance of that happening is, well, probably zero. We’re probably much better off trying to win the lottery.
But wait. Before you rush off to the nearest liquor to buy this week’s lotto tickets, we’ve got some good news. Even though our chances of becoming a millionaire are slim, we can still manage our money like one. No, we’re not going to tell you how to buy hundreds of shares of Apple stock. Or how to pick out the perfect yacht.
These are simple money moves any normal, non-millionaire person can make today. Each secret can get you closer to achieving your big goals.
While there are several key secrets of the invisible rich and the millionaires next door, below are a few of the most common secrets that we can all incorporate into our own lives to grow wealthy.
Don’t Spend Beyond Your Means
The invisible rich do not stretch financially. They only buy what they can afford and don’t try to keep up with Joneses.
If you want to live like the millionaires next door, the first step is getting a firm handle on your budget and spending. Tracking your expenses for a month can help you determine where your money is going so you can learn to live within your means.
For example, if you struggle to keep track of your expenses, consider putting a budgeting app to work. These apps link to your checking account and credit cards and automatically record your purchases and transactions.
Save So That You Can Invest Early & As Much As Possible
Don’t just save just to save. If you store that cold, hard cash in shoeboxes under your bed, it could get stolen if someone breaks into your house or go up in flames if your house catches on fire. Or both.
But more importantly, the rich know that cash that’s just sitting there loses value over time due to inflation & a variety of other factors. That’s why they invest! The rich invest because they want their money working FOR them, while they eat, sleep, work, take vacations – you name it.
They understand the value of putting their money to work. Whether through retirement plans such as 401(k)s, IRAs, 529 plans for college or any other kind of savings plan, the invisible rich understand the concept of compounding and how money can grow over time.
Compounding interest, meaning the interest you earn on your interest, can be key to growing wealth. If you have yet to begin making contributions to a workplace retirement plan or IRA, it’s important to consider where that fits into your budget.
Compare the benefits of a Roth vs. traditional IRA to decide which one is right for you. A Roth IRA allows for tax-free distributions in retirement while a traditional IRA features tax-deductible contributions.
Minimize & Avoid Debt As Much As Possible
The invisible rich believe in paying off their debt. They don’t let the balances on their credit card accumulate and prefer to pay bills off as they come in.
If you struggle with making debt payments, consider ways you can reduce your debt or at least make it less expensive. Refinancing student loans, for example, can make your payments more affordable. Transferring credit card balances to a new card with a 0% APR could help you pay it off faster.
In addition to avoiding debt, the invisible rich also take care to protect their credit scores. Checking your credit score every few months and learning what can help or hurt your score can help you secure a good credit rating.
Look At The Lifetime Earning Potential of a Career Path, Before Choosing It
Do you think people randomly choose to become doctors, lawyers and investment bankers and then magically become rich down the line? No!
Smart wealthy people seek out professions that will provide the most financial security and stability. You can do the same by evaluating your career choices. Considering long-term earning potential can help you pinpoint a career that both suits your experience and interests, while also delivering financial security.
When considering how to grow wealth from a career perspective, consider also the value of any employee benefits you may be able to receive. Things like student loan reimbursement, quality health insurance and a 401(k) plan with a matching contribution can all help in furthering your financial goals.
Get Good Insurance & The Right Coverage
No this is NOT a commercial. Seriously, the rich & wealthy KNOW about life insurance. And they use it to their full advantage. You have to know how…
Wealthy people believe that the cost of insurance is worth it in order to protect what they own and their loved ones. Whether it be house insurance or life insurance, the invisible rich place great importance on protecting themselves and their family from unforeseen circumstances.
If you haven’t checked your insurance coverage lately, consider taking time to audit your policies. Consider whether your current coverage is sufficient or whether you need to increase your policy amounts. It’s also helpful to revisit your insurance at least once a year to make sure your policy still fits, especially if you experience life changes, such as a marriage or birth of a child.
And there you have it. These are some of the best, top, well-kept secrets of the rich and wealthy. If you want to start living your life to the fullest like them, you may want to do some research and start taking advantage and implementing some of these secrets today.