How to Get Rich: Back to the Basics

Most of us don’t have the luxury of becoming rich by chance or because wealth was handed to us. That’s okay. Most wealthy people weren’t either.

So how do we make sure we become wealthy? The only sure way to become rich is to do it the hard way. That is, to create our own luck by following the basic rules of making money.

I think of money and wealth as a sport. Just like professional athletes who still spend countless hours practicing free throw shots or their golf drive, money is the same way. Creating wealth is just a matter of understanding and applying the fundamentals and always striving get better at mastering the basics.

Here are the basic rules of money that will guarantee you to become rich, as I see it:

Control Your Outcome:

  • Keep control on spending and expenses
    • Understand how credit and debt works and keep debt to a minimum

    Produce More Income:

    • Get educated: people with advanced degrees earn more money
    • Make yourself valuable
    • Negotiate a higher salary and receive promotions
    • Obtain higher paying jobs
    • Produce other additional income streams by creating your own business

    Save and Automate:

      • Adjust to live within your means
      • When you earn more income, save more
      • Automate your savings so it is effortless and does not require any decision making

      Invest and Diversify:

      • Put your money to work for you by regularly investing your savings
      • Take full advantage of tax-sheltered retirement accounts, employee matches to your 401k contribution and the tax advantages and leverage that real estate offers
      • Diversify in order to maximize your long-term returns
      • Understand the Power of Compound Interest

      Protect Your Money:

        • Limit your losses as much as possible by taking calculated risks
        • Keep your portfolio balanced, and adjust as you near retirement
        • Seek ways to lower your taxable income so you can keep more of your money working for you

        Build Relationships: with the best professional advisers and mentors

        This is the surest way to become rich. It is not complicated. Building wealth just takes patience and discipline. If you can reduce your debt, save more than you spend, and invest your savings regularly, you will become wealthy.

        Teach yourself the fundamental rules of money and practice them over and over. If you can master the basics of money, you will become rich.

        One Response to How to Get Rich: Back to the Basics

        1. You could create a rising stream of passive income by investing in
          dividend growth stocks. Do not chase highest yielding stocks,
          instead buy on dips the ones that exhibit balanced dividend
          yield/dividend growth characteristics. Best Regards, Dividend
          Growth Investor

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