The Ultimate Guide to Achieving Your Financial Goals (How to Become Rich)
They say that the American Dream is dead. In a world where it feels like the only way to get rich is to inherit money or to work in tech, trying to pursue your financial goals can feel like a losing battle. We’re here today to prove to you that the future is rosier than you think.
79% of the millionaires living in America did not inherit any of their wealth. In fact, only 2% of them said that they came from an already rich family. And if that hasn’t already cheered you up, 93% of this group made their money by working hard, not by having a highly paid position at work.
We all have different reasons for wanting to get rich – 42% of people said they wanted to make the money for their retirement, while 24% of people said that they wanted the money to look after their family.
Whatever your reason for wanting to be rich, you have come to the right place. We won’t be teaching you how to get rich overnight, but we will talk you through the small steps that you can take today that will have a huge impact on your finances in the long run.
There is no one way to become rich and you are actually more likely to achieve your financial goals if you combine more than one money-making method to build your finances. In this article, we are going to talk you through some of the most effective ways to make money.
Keep in mind none of the below is investment advice, but rather just meant to be an introduction for you to begin to understand how to become rich and the process of becoming rich — and how to make the most of your wealth.
Anyhow lets get into the content — now that you know what to expect from the rest of this guide, let’s start at the very beginning.
How Did Most Rich People Become Rich?
The question we get asked most frequently is “Is it even possible to get rich if you don’t come from a rich family?” Yes, it is — In fact the majority of the rich in America are self-made, and you might be surprised to hear that only 21% of millionaires surveyed received any money from an inheritance.
We believe in the concept of working smart and not harder – that includes getting rich. Why would we come up with a strategy for getting rich from scratch when so many people have done it before us and we can learn from their journey.
Let’s take a deeper look at how the rich in the US made their money.
They Climbed The Corporate Ladder (Stock Options and Rewards)
15% of American millionaires work in high-level corporate jobs. So, becoming rich because of your job is a possibility if you are working in the right industry.
Many companies offer stocks as incentives for beating sales targets or for contributing something worthwhile to the company. However, it is more common for companies to offer bonuses for the same kind of achievements.
Once you reach a high enough position at your company, your bonuses could reach astronomical levels.
They Invested Fiercely (High portions of their income or aggressive allocations)
The younger you start investing, the better the payoff you will see – as your money will have more time to make you money. The younger you are, the more aggressive you can be with your investments too. Younger people are more likely to invest larger portions of their income and therefore see better results.
This is something that you should bear in mind when you start investing. If you want to see results fast, then you are going to have to take a few risks when investing – including putting a larger slice of your monthly paycheck into your investment accounts.
They Either Worked Hard Or Worked Smart (7-days a week working, or delegating work)
We have already mentioned that we believe smart working is the way forward – it helps to avoid burnout and it gives you the chance to make better use of your time.
All of us can tweak our working practices and how we spend our spare time to get more out of them. And people who work smart are protective of the time they spend on their side hustles and passion projects.
If you want to learn more about how rich people spend their time, you can look into their mourning and working routines, many of which can be found online.
They Took Risks When It Made Sense To (Outsized return, Investing, and starting a business)
Rich people, especially people who got rich at a young age are brave with the money they do have and they take risks.
We are not saying you should throw your money into every project you see but if you need an investment opportunity or have a business idea that seems solid and profitable – then you should take the risk, it could pay off in the long run.
If it doesn’t, then you have learned an important lesson and you are more likely to make the right choice next time — Think about George Lucas taking a risk on a handful of animators fresh out of college, who eventually became Pixar.
They Knew What They Were Working Towards (They had Goals)
You are more likely to be successful if you set yourself goals.
What is the difference between telling yourself you are going to be rich one day and setting yourself to be a billionaire by the time you retire? Well, the latter gives you a deadline and the incentive to make a strategy that will help you achieve it.
Before you go any further, it is time to think about what your financial goals are. Write them down – you are 42% more likely to achieve the goals when you physically write them down.
They Remained Patient And On Track
There is one thing that the rich have in common – they didn’t give up after the first night. Or the second night. In fact, they all kept going until they got what they wanted out of life.
The sad news is that there is no “get rich quick scheme” that works, otherwise, we’d all have already done it. However, the current millionaires have proved that it is possible to get rich if you work hard and make smart choices with your money.
But you also have to be patient and not give up, even when progress feels unbearably slow.
What Can You Do To Become Rich?
Now, we are going to take everything we have learned from the section above and turn it into an actionable plan that you can employ in your life.
We have broken this plan down into 3 sections. We recommend you set aside a day to put together this plan and start making your first steps towards getting rich. The time you invest now will pay off tenfold in the future.
You will notice that this place encourages you to diversify the way that you make your money. This will help you to keep hold of the money that you make.
This plan will help you to start making more money, whether you have $5 or $5000 to spare. A lot of the process involves actively pursuing ways to make money and changing your attitude towards doing so.
We will start by asking you to map out how much money you want to make and buy when. Then we will use the tricks that rich people use to grow their money. Finally, we will look at what you can do in the long run to keep your honeypot growing for the rest of your life.
The first step to achieving your financial dreams is to establish what they are.
Create A Financial And Life Plan
The plans and goals that you set down will be the solid foundations that the rest of your money-making will build upon.
Not all of these plans will stay the same over the next decade, year, or even month – but the most important thing you can do is start. You will never finish the journey if you don’t take the first step.
Be flexible with your plans, life changes and you will have to change your plans to account for that. Don’t worry about that — when you come to that bridge you can cross it, but until then you need a financial plan and idea, some goals, to pursue and keep yourself on track if you truly want to become wealthy.
Outline What Life You Want To Live
Let’s start by looking at why you want to be rich and what you plan to spend your money on.
Do you want to be rich so you can have a sports car? Do you want to be rich so you can buy a brownstone in New York? Do you want to travel the world once you retire? Do you want to do all of the above?
Knowing what you want will help you to set a target figure for how much money you need to earn in total. You can then break this figure down into smaller time increments – i.e. How much do I need to earn every year to make this much money?
Choose Your Career Wisely
If you want to be rich then you need to be realistic about your career path — there are many careers that you will not get rich through – like (non-corrupt) charity work or writing poetry, so if you want to get rich you should probably look elsewhere when it comes to work.
There are some careers that you can make money in by working very hard and there are some careers that you can make more money in without having to work your socks off. Portfolio Management might not be your dream job but it might help you to live your dream life outside of work.
Never Stop Learning & Evolving
15 years ago no one would have dreamed that it was possible to make money by buying and selling digital coins online – but there are now many people who have got rich because they invested in Cryptocurrency.
The more you pay attention to financial trends and the more skills you teach yourself, the more likely you are to be able to take advantage of new opportunities.
You should also remember that your priorities will change as you grow older. What is important to you at the age of 20 will not be the same things that are important to you when you are 50.
Decide On An Investing Strategy You’re Comfortable With
15 years ago no one would have dreamed that it was possible to make money by buying and selling digital coins online – but there are now many people who have got rich because they invested in Cryptocurrency. The more you pay attention to financial trends and the more skills you teach yourself, the more likely you are to be able to take advantage of new opportunities.
You should also remember that your priorities will change as you grow older. What is important to you at the age of 20 will not be the same things that are important to you when you are 50.
Keep Your Expenses On Track
You are not going to get rich if you are spending more money than you are earning – that is one of the inescapable facts of economics.
If you find that you have a spending problem when you don’t earn enough money then it is not going to get any better when you are earning more. You need to change your mindset and take control of your expenses. The sooner you do this, the better off you will be. If this is something you are struggling with you should consider getting help from a financial expert.
Invest As The Rich Invest
The best place to learn how to do something is from the people who have already done it. So, now we are going to look at the 4 tips you can take from successful investors and apply them to your life.
These 4 tips are about changing your mindset when it comes to investing – you want to think like a rich person if you want to become one. Remember that being rich is a lifelong task and you don’t want to burn yourself out trying to get there. You want to be able to enjoy your rewards when you get them.
Invest In Yourself, Your Career, And Your Business First
Investing in yourself is the best investment you can ever make — when we tell people to invest in themselves, they often get confused by the concept. Think of the money you spend on your college education as an investment in yourself. If you aren’t the college type then think of doing deep-dives on topics and learning new information in general. Both of these can lead to a better-paying job — or knowledge and skills that are essential for starting your own business.
The markets can be unpredictable but you are in control of exactly how much effort you are putting in at work and how much value you are bringing to your business. If you own your own business, then you may want to consider investing in it. You will understand how to make the most of this money and how you can use it to push your business forward. Invest in yourself and it will pay off.
Invest In What You Understand
When you first start investing, you may be tempted to go all in and put a lot of money into high-risk investments. This is something you should try to resist, in the beginning.
When you start investing, you should stick to what you know. If you are working for a company that has big potential, invest in it. If you are an expert in an industry, invest in that. Use the knowledge and skills you already have to start building your investment portfolio.
Don’t Be Afraid Of Risk
This piece of investing advice does go against the piece of advice we just gave you. However, we recommend that you use that tip to get yourself familiar with the world of investing using that tip, before employing this one.
If you are looking to make more money in a shorter period of time then you are going to have to take more risks. With greater risk, comes greater reward – especially when it comes to investing.
The danger of getting involved in riskier investments is that you have more of a chance of losing your money. However, the rich never invest more money than they can afford to use. And you should do the same.
Keep an eye out for investments that sound appealing to you, and, at first, take a risk every now and then.
Put Money Into Your 401K Or Other Company Pension
Around 80% of the rich invest some of their money in their company’s pension plan.
Financial experts recommend that when you first start saving you should be putting 8% of your monthly income into a pension plan, and 13% into investments and savings. As you get closer to retirement these numbers should be reversed.
Don’t Kick Yourself For Failures
When we talked about the habits of rich people earlier in the article, we mentioned that one of the most important traits you can have is perseverance.
People who end up achieving their dreams don’t give up. Even when they fail. Even when everything is going wrong. They pick themselves up and keep going. This is an approach to your life and your finances that you should try to cultivate.
The first step towards this mindset is perhaps the hardest, you have to learn to forgive yourself when you make mistakes and when things go wrong. You should be kind to yourself when you make a badly timed investment. But you should also show self-compassion when you make a really bad investment. You won’t make more money by beating yourself up.
The only way to achieve your dreams is to forgive yourself and keep going when things go wrong – because they will go wrong at some point.
Diversify As Your Wealth Grows
The section before will have helped you to start building your portfolio and wealth. Now, we are going to look at what you should do one you have built a little bit of wealth to keep it and make even more money.
These 4 tips will help you to move even closer to your financial goals. When it comes to making money, the important thing to remember is that it generally takes time and you will need to be patient.
Invest In Stocks
When you talk to people about investing, the first thing they usually think about is the stock market. Now, we are not suggesting that you go full Belfort and people a day trader – but, we can all benefit from investing in the stock market. If you aren’t familiar with investing in stocks you can check out our stock investing guide to get started — it’s not too complicated, but is very in-dept just like this article.
You could trade the stocks yourself, however, 27% of millionaires surveyed said that they put their money into managed stock trading accounts, while another 4% said they were part of Venture Capitalist groups.
How you want to trade stocks will depend on how you want to invest your time and which money making stream is most important to you.
Invest In Real Estate
There are many different ways to invest in real estate – house flipping, renting our properties, or just buying and selling houses when the housing market is strong.
You will need a sizable amount of money to start investing in real estate, but the profits will add up quickly. Singer Ed Sheeran has invested a good part of his royalty money into a real estate empire that is now worth over $61 million. You don’t have to start on the same scale as Sheeran, but there are real money making opportunities if you invest in real estate.
Invest In Alternative Investments
After you have started building your stocks portfolio or your real estate empire it is time to diversify.
The real benefits of diversification is that if one market crashes you don’t lose all your money. For example, the price of gold very rarely goes down, but the housing market has had a few crashes in the last 30 years.
You can keep your money safe by making sure you invest in different things – if you buy a piece of art, invest in a mining company, and invest in an Italian restaurant it is very unlikely that all three markets will crash at once.
Invest In Cryptocurrency
Cryptocurrency is one of the newest ways to invest.
It is a high risk investment but it does offer growth opportunities that many other markets can’t compete with. Trading Cryptocurrencies can be done with a push of a button and it is much easier to get into than stock trading.
The major downside of trading Cryptocurrency is that it is completely unregulated. This means that no government has jurisdiction over the Cryptocurrency market and criminals or thieves will not be held accountable if they steal from you.
Invest Around The World
Once you have some money, you should start thinking about expanding your investment portfolio and making it international.
The easiest way to do this is to hire someone to handle your overseas investments for you or to put your money into an ETF (the bank will then make trades on your behalf).
Doing so means that your money is more likely to be protected if America goes into another financial crisis..
6 Tips To Help You On Your Journey To Becoming Rich
To end this article, we want to give you 6 tips that will help you to enjoy your journey to becoming rich and will put you in the position to enjoy your wealth when you have it — these are tips we’ve pulled both from observing rich people in their lifestyle, as well as things we’ve found particularly helpful in our personal journey to becoming rich. On our journey we had some growing pains, and these tips helped overcome them.
Keep Yourself Healthy
Taking care of yourself is incredibly important. You want to be well enough to enjoy your money when you get it. But you also don’t want to be miserable and unwell for the time it takes you to make the money — because of this once you’re doing moderately well off you should invest in your health.
Take time out of your day to go to the gym, do some yoga, go for a run, cook healthy food, and take care of your skin — these ‘investments’ in yourself, your health, will pay dividends in the future in the form of lower medical bills, higher productivity, and just quite frankly providing you a better more enjoyable life.
Reduce Stress & Live Intentionally
You will find that applying intentionality to your life will make you more productive, happier, and you will achieve your dreams quicker. You will find that knowing what choices you want to make and why will also allow you to live a more satisfying life whether you are rich or not.
Try to cut as many sources of stress from your life as you can. Practice saying no to opportunities that don’t serve you and protecting the time you need to work on your own goals. Try to avoid burning out to achieve someone else’s dream (even if that is what your boss thinks he is paying you to do).
Develop A Healthy Relationship With Money
You likely have heard the phrase “money doesn’t buy happiness” many times. This isn’t entirely true, as money can buy happiness to some degree – but the truth is that if you have a bad relationship with money, or outside of your finances, then you will likely struggle to be happy.
If you hoard your money, refusing to spend any of it on yourself and are not generous to those around you – you will not experience the benefits of being rich, or wealthier than you once were.
However, if you understand that buying coffee out isn’t a waste of money because of how much you enjoy it, and how much time it saves you to just grab a starbucks (hello Graham!) when you’re out then more money will make you happier – to some degree. Basically use your money to improve your quality of life, to make life easier and more enjoyable, once you have a good chunk of money – don’t just hoard it.
Avoid Non-Productive Debt
Debts that are considered productive are mortgages (that keep a roof above your head), business loans (that allow you to hire those extra staff), and basically any loan that is used to make you money (safely) rather than for pleasure-purposes. Debts that are not considered productive are credit card debt, personal loans, and outstanding household bills — basically things that pin you down and don’t help you make more money.
If you want to be rich you should start by paying off your debts and then budgeting so that you can avoid taking out unproductive loans in the future. You should also avoid taking out a loan to invest – if the investment goes wrong, you will have got yourself in even more financial trouble and have the interest to pay on it too. The only exception to this is low-level margin debt or mortgage debt, however this depends on your situation and skill-set, so you’ll need to evaluate that for yourself.
Avoid Toxic Relationships & Negative Behaviors
If you have a big goal in life, you will want to make sure that you put yourself in the best position to pursue it. For many people, this means only having friends who support them and who are just as ambitious as they are. Maybe even looking for mentors. You should also try to avoid substances that will stop you from performing to your best ability. A drug or alcohol addiction would also be a major drain on your funds.
Finally, you should make sure that your partner, if you have one, is on the same page as you, and you both understand the goals the other is working towards — if you’re looking to save money and become a millionaire as soon as possible, working 25 hours a day 8 days a week, and they just want to have a baby or travel the world, then you need to be realistic and either give up your goals or come to a serious compromise, rather than drag a relationship out until it becomes unhealthy.
Track Your Net Worth And Portfolio
When people are trying to lose weight they are told to take progress photos and keep track of the numbers. The same happens when people take up a new hobby like running or fitness. Starting on the journey to get rich should be no different — you should track your progress along the way, not only for the satisfaction boost when you see yourself making progress, but because you’ll be able to see when you’re swaying from your goals and exactly what’s going wrong.
The best ways to track your portfolio in our opinion is to use a tool/software to do so — we’d recommend Kubera if you invest in cryptocurrency or many alternative assets or Personal Capital if you primarily invest in traditional investments or are a long-term investor in general.
Without that data you likely wouldn’t know what is the problem — it could be your investment decisions, it could be bad budgeting, it could be a reduction in income from side-hustles or your business, it could be anything — and without tracking you’d struggle to fix and resolve these problems.
Summary & Wrapping Up
79% of American millionaires did not inherit any money as we mentioned before — Yes, that’s right, the overwhelming majority of the rich living in America right now are self-made. This statistic should fill you with hope. It is possible that by following the right financial advice and making smart choices with your money – then you could achieve your financial dreams.
One of the best ways to learn how to get rich is to study the people who have done it before you. This is what we have done in this article. While you are pursuing your financial dreams, remember to look after yourself – there is no point getting rich if you aren’t going to be well enough to enjoy it.
If you have any other questions or simply want to discuss the topic with us feel free to contact us on our contact page below — we aren’t financial advisors here, so we can’t give you financial advise, however we can recommend you advisory services, including some free ones, if we aren’t able to help you ourselves.