How can you ensure you create wealth for yourself and leave a legacy for generations to come? Though it might take some time, there are steps you can start taking today to generate wealth.
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Here are some tips from financial experts to start creating lasting financial security.
Track Your Spending Closely
The first step to take to ensure proper money management is to become acquainted with your cash flow. You can’t make financial goals if you don’t know what you’re working with.
Kira Byrd, entrepreneur and compliance strategist at Curl Centric, started tracking her budget and was able to cut $100 a month worth of expenses.
“By saving $100 a month and placing it into an investment account, we didn’t even miss it, but over time it became a sizable amount,” Byrd said. “Then years later we have a small, consistent amount that has turned into a larger amount of money.”
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Invest Your Money
Investing money is a way to feel like you’re generating income without having to put in much work. Jared Hubbard, fintech product manager and registered associate of digital brokerage services at Plynk, said even a few dollars invested every month can net you a sizable chunk of money.
“You can start focusing on your long-term wealth without needing a significant upfront investment. By capitalizing on compounding returns, individuals may supplement their earnings and work towards achieving their financial goals,” Plynk stated. “The sooner you start investing your discretionary income (no matter how much you have), the more your money may grow over time.”
When it comes to where to invest, Robert Johnson, the chairman and CEO at Economic Index Associates, said to put your money in stocks — even with the market’s inherent risk.
“There is an old Wall Street adage that states: ‘You can sleep well or eat well.’ You will sleep well if you commit funds to low-risk investments like money market funds or Treasury Bills, but your investments will not grow substantially and may even have trouble keeping pace with inflation. You will eat well by consistently investing in stocks,” Johnson shared.
Automate Savings
Johnson recommended making putting money away an established habit. He said the easiest way to do this is to take it off the to-do list, and just automate contributions into your savings account, even if it’s a small amount.
“Making retirement and savings contributions automatic is a wise approach. One must make saving money a habit. And habits — good or bad –develop over time,” according to Johnson.
Control Lifestyle Spending
It’s important that, while on the way to building significant wealth, you don’t spend like you’re already among the upper crust-even when your income goes up.
“Instead of buying a new car, direct raises and bonuses straight into diversified investments,” Yuri Berg, the chief business development officer at FinchTrade, said. “If you increase your lifestyle expenses with your salary, then you will always be running behind.”
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This article originally appeared on GOBankingRates.com: Effective Tips and Tricks To Build Lasting Wealth
