All of us want that social media lifestyle, fancy cars, massive mansions, luxury watches, and stacks of cash on the table.
Let us clear something here, this is not real wealth, real wealth is unseen on social media, I am talking private jets, exclusive dinners, special-made watches, and ultimate privileges everywhere you go.
Investment portfolios, Financial advisors, stocks in hundreds of companies. This is real wealth.
In this Article, I will reimagine myself as a 20 years old young man that wants to build the wealth I have today, so focus up. And lets get started.
Step 1: clear your debts.
If you do not have any debt, that’s great, see you in the nest chapter, but if you have some debt, be all ears.
The first and the most important thing is to clear your debts, which most likely they are not (good debt) because that is a massive hold back, if you are not sure what is good debt, click on it and read what is good debt and what is bad debt.
As a 20 year old champ, most probably you have a car loan, student loan, a credit card you used to show off, or borrowed some money for some reason, if you want to build wealth, you have to start debt free.
If you have multiple debt, its not bad news, you can go to (snowball debt calculator) and check it out, it guarantees that you close your debts as soon as possible, but only if you commit to it
Step 2: Recalibrate.
Now that you are debt free, this means that you have some spare money that you can allocate towards your wealth, but if you want to take it very seriously, you will need to cut down on few things.
Before you get into building wealth, you need to understand a simple map, it breaks down wealth very simply and will absolutely make you rich.
You need to know the difference between Assets, and Liabilities, and I am assuming that you have heard that a lot but I will explain it again:
Asset: something you buy and it returns money to you.
Liabilities: something you buy and spend money on.
BUT, not all assets will make you reach, in fact, many asset classes are used only to retain money, or to save it from inflation, which will not make you rich if you protect your money. So I will make a list of items, and will connect the dots later.
Gold: Is a perfect asset to buy to protect your money not only from inflation, but from spending too. But Gold will not make you rich. Just because you buy it.
So I encourage everyone to buy gold on monthly basis, not ounces, maybe grams but only in bars, because bars are easier to sell, and no making charges that will make you pay more, sell for less.
If someone bought 1 gram of gold a month for 5 years, that is 60 grams of gold, which today remain 60 grams of gold, but if you save 100 a month, that will make 6,000 but it will not be the equal value of Gold.
Real Estate: since you are here, I am assuming that you are not ready to buy a house, or already own one unless your parents have left you a little something, but real estate falls in the neutral assets class that does make you wealthy, but not as quickly as the upcoming assets.
Real estate is a game of money, flipping, mortgages, and refinancing, so you really need to understand banking to be able to play this game.
If you understand banking and how banks work, comes the homework of Location, location, location. In real estate, locations is everything, an apartment in London could make you 7% ROI (Return On Investment) but the same one in New York could make you 5% ROI
This 2% is a big deal for real estate, and not only that, think of multiple units, which leads up to 20%.
In the soon future we will write and article on Real Estate investing, so stay tuned.
ETFs. & Stocks: Now this one is tricky, you need to be very involved in the market, the news, and some politics, because these are important for this business.
Stocks and bonds can make you wealthy. But that need way too many years. But if you find the right assets for you, and that plays well, you will build wealth,
I Highly recommend you to research S&P500, vanguard, and Nvidia, but most importantly, evaluate the risk you can take before investing.
Now comes the most important part, and the most important asset of kind, Businesses.
Buying and Investing in Businesses:
Starting your business is the best way of creating and building wealth, that does not mean all businesses will build wealth, but if done well, it will.
Many wealthy people invest in startups, and in running companies, that usually make their money grow as these companies grow.
Unlike shares, you are investing in companies in your areas, funding them actually can increase your chances of doubling, tripling, or 10x your money in short time, as no business wouldn’t want to make 10 times their money.
With buying companies and investing in startups, you have to be careful, selective, and attentive to every single detail in the business to protect your money.
The Roadmap to Build Wealth
Let us start from scratch, considering that you have zero money for your name, and you want to build wealth, that is what I will be doing.
Step 1:
Learn something about one thing, lets say a side hustle or some job you do, and if you find that hard to do, visit our Side hustle idea Generator. And put all the money you earn from that towards a small investment or an asset that goes in your portfolio, promise yourself to repeat the same cycle every month, or from your paycheck.
Let us have Gold as an example here, and we will get back to it later.
Step 2:
After you own your first asset and put all the income from that asset in a high yield savings account, start focusing on the 2nd asset that you want to buy, mainly if you are creative, you can reach to the first and second assets within 1 year.
Here we will think of a car that you give for rent.
Step 3:
When you own Physical assets that make for you money, go to the bank with an evidence of ownership, and give them to the bank as collateral towards a mortgage for a rental property.
So far, you own a bunch of gold bars, and a rental car that 1 retains your money value and most probably increasing in value, and a car that you are renting out and its making more money for you.
You go to the bank and give them all on collateral towards a home, that you as well rent it out, either to a tenant or Airbnb whichever works best for you.
Step 4:
The money you are making now is the money that will build you wealth, divide all the money you get into different other assets, maybe expand on one of them, and add more like stocks or etfs.
We will not go deeper in here, we are already preparing a full article on that.
Step 5:
Congrats, you now have the present and the future, but you are not wealthy, so focus up here.
Considering that you have a safety net, and income that protects you, you can start a small business that can make you money, but pour the money into your business only, do not pay yourself for the first few years, buy more assets for the business and expand.
Most millionaires make their money from companies they built, scaled, and sold for profit, the money they gain from that goes to the previous investments, and repeated cycles of starting new businesses but on larger scales since they have more capital and more money to do so.
Even small businesses are done well, they could potentially make millions when selling the business, there are countless numbers of companies that started very small and, in a garage, or a bedroom, and few years down the line, they made millions selling the company.
Conclusion
To Build wealth, you have to have a clear plan, not only the wish, and you have to expand your knowledge on money, banking, financial literacy, assets, investments, and many more, that’s why we recommend you to stay tuned and wait for new articles that will help you to build wealth with us
