How to Become Rich in One Year?

Photo: KnowInsiders

Everyone has dreams about winning the lottery and getting crazy rich overnight. People want to get rich. Just do a search on Google Books and you can see that it’s been a rising trend since the 90s.

Many people are looking for ways to get their first 100K, or ways to invest for a better retirement. Some are trying to succeed as entrepreneurs. People want to have enough money to buy beautiful homes, powerful cars, and great vacations. But not many know what getting rich really means and what it takes.

To become rich in just ONE year, please keep those things in mind

1. Money mindset is everything

You need to have a positive money mindset when it comes to creating wealth. Everyone carries a money story and it’s your job to understand what yours is and if it’s holding you back. Reframing your story to a millionaire’s mindset is essential for success because rich people think differently. How to get rich can’t be a passing phase in your life; it takes work and commitment.

Common money mindset traps to avoid

The hustle trap: The more I work, the more I earn, right? Wrong. You may be able to add an extra hour of overtime to your workday or pick up extra shifts, but at what cost? Living a rich life is also about your lifestyle. You’ll want to set up your income sources so that you can earn money in less time. Adding a passive income stream is a great way to do this, but be warned – passive income still requires upfront work. But, it’s way more effective than picking up an hour or two of overtime every now and then.

The less I spend, the more I’ll have: Technically that’s probably true, but it also leads to a very dull life. While there is some merit to cutting back on expenses, it’s what you cut that matters. Cutting back that $12.99 you spend on Netflix every month might seem like a good start, but not if it’s your only source of entertainment.

Spending less on things you love, for instance, that $3 Starbucks coffee, is not going to make you rich. It might increase your bank balance incrementally, but what about the quality of life?

What if you’re just a little more conscious of the things you don’t actually enjoy, and cut back on that instead? For instance, finding a smaller apartment at a better price because you spend too much time cleaning and too much money on heating. Frugality might have a few merits and make you appreciate your resources, but can also zap the life right out of, well, life.

The goal is to spend less time faffing over $3 questions and more time asking the $30,000 questions.

There isn’t enough money out there: If you’ve grown up in a household where there was a lack, it’s possible that you might attribute this quality to money too. Here’s the thing though, rich people know that money is as bountiful as the sands on the shore. Adopting an abundance mindset will help you realize that there’s enough money to go around in the world – even for you.

2. Millionaires still budget

Photo: GOBankingRates

Hard to believe, but it’s true. Even millionaires follow a budget. The biggest secret on how to get rich and stay rich is spending less than you bring in. There will always be wants that exceed budget limits, even for millionaires, because there is not an unlimited supply of money.

3. Money management is key

Good money management is so important to get rich and stay rich. Money management is behavior and habit. You need to be mindful of where you are investing and spending your money. There is a specific strategy to growing your wealth and maintaining it and you must follow it like you do a workout regime.

• Cut back on lifestyle expenses

Let’s assume you’re the type of person who enjoys going out for food and drinks most days of the week.

It’s a good idea to start cooking more at your home. This change can help you to avoid the high prices of eating out at restaurants.

By eating more at home, you can help to cut your monthly expenses by an average of $200. That’s a saving of $2,400 in a year!

• Lower your energy bills

There are several ways to save on your utility bills. For example, you can install a smart meter, energy-efficient bulbs, and insulate your home if you haven’t done it already.

A smart home meter can help you make better energy choices and control your bills. It gives you accurate real-time information on your overall energy consumption.

Since the device can be programmed to shut off when not needed, it can prevent your electrical appliances from running and wasting energy.

Insulating your home can prevent the loss of heat through walls, roofs, windows, floors, and doors. With proper insulation, it becomes easier to meet the heating and cooling needs without your system running longer.

• Avoid expensive premium brands

As a consumer, you have some lower-cost brands out there offering quality products that can meet and even exceed your expectations. Keep in mind expensive products do not always translate to ultimate superior quality.

Don’t be afraid to try out the slightly cheaper brand and compare your satisfaction. You’re likely to notice no significant difference except in your savings.

4. Invest your money for growth

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Investing in assets that will appreciate over time and provide you with a return on your investment such as dividend or interest payments is smart. The goal is to build your asset portfolio and make it so strong that you can live off the passive income in your retirement.

• Invest in stocks, shares and mutual funds

When you invest in stocks, you become a shareholder of a corporation. You’re entitled to be part of the earnings and assets of that corporation. As a shareholder, you can make money through dividend payments or by selling your shares.

Investing in stocks can help you build wealth if you make steady investments over a long period.

The average annual return is estimated to be 7%. This means your initial investment in the stock market will double in ten years.

It’s good to keep in mind stocks can go either way. So before buying your first stock and putting it on autopilot, at least make sure you’ve mastered the fundamentals of stock investing.

Stocks carry more risk than mutual funds. With mutual funds, you can diversify your assets.

It can consist of a mix of stocks and bonds or 100% stocks that are not entirely of one corporation.

If the unthinkable happens and stock prices decline significantly, you won’t be hit hard like you would if you only invested in individual stocks.

• Invest in real estate

In my humble opinion real estate is one of the safest investments to accumulate wealth.

However, it typically requires high initial capital that you may not be able to raise as for now.

If you already have enough money saved, don’t waste more time. Research the best areas where to put your investment.

Whether you’re buying, developing, or selling real estate properties, the rewards are certainly encouraging.

• Invest in businesses

Business is a broad subject. While there are hundreds of business options, it’s advisable to invest money in a business centered on your skills, hobbies, interests, and talents to increase your chances of success.

Put simply, you should focus on a type of business you would love to spend time on even when things aren’t as swift as you anticipated.

5. Build your business around your personal financial goals

As a business owner, you have more control over the money you make versus being an employee with a set salary. If you want more money in your pockets, you can increase your revenue and your profit margins to ensure you are taking home more money. The more profits you have in your business the more you can pay yourself a dividend or bonus, depending on the legal structure of your business.

6. Create multiple income streams

Photo: Aisles of Life

Smart business owners create more than one income stream as it protects them from fluctuations in the market. That means if one source of revenue dries up due to market conditions, other sources of income can protect you from a loss.

• Start a blog

It easy to create a blog and you can work from anywhere. Just like most methods, a blog won’t make you rich fast. However, a blog is a great way of creating a new stream of income.

It takes time to reap the benefits, but in my opinion, its worth it!

When starting a blog, I’d recommend venturing into something you’re passionate about. For example, if you love cooking food, you could start a food blog to share different recipes with people.

To earn money from your blog, you’ll need to monetize it. You can do affiliate marketing, email marketing, securing sponsorship, selling eBooks and online courses, etc.

7. Don’t check out

This is my most important tip. Hiring financial help such as accountants and financial advisors does not leave you with the right to check out the financial activity in your business. Nobody will care about your money as much as you do, so never give your financial power away. Take the time to invest in educating yourself about money management so that you can oversee what is going and understand when an investment is not doing your portfolio justice.

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