11 Indicators that show you are going to be rich
Warren Buffett is one of the richest people in the world because he saved and invested. And did not follow the classic investment schemes (e.g. crypto currency) of getting rich quickly.
According to Buffett, who thinks that crypto currency is one of the classic schemes to get rich quickly and easily that don’t usually work. Owning bitcoins will not guarantee future wealth, but the right savings and investment strategies that you carry out throughout your life will.
While the chances of making a billion-dollar fortune like Buffet’s are unlikely, there are sensible ways to accumulate wealth without having to bet on a bubble.
It is difficult to put a specific number of zeros on what can be understood as “wealth” because it is personal and depends on many factors e.g. where you live, whether you are working or have business, etc.
11 Signs that indicate path to rich
These 11 indicators are easy to follow and will help to generate fortune. Even many of these tips go hand in hand, so it will be easier to apply them all and require little effort on your part.
If you are already following some of them, great! You’re on the right path to being rich.
1. Start saving for retirement from your first job
To achieve a certain fortune, part of the salary, must be reserved for savings from the first salary you receive.
Retirement may seem far away when you start working. But the road will be even longer if you don’t prepare for it. Saving as soon as possible generates compound interest which can make a big difference in the long run.
2. Always make your loan payments on time and in full
Whether it’s a student loan or a mortgage, whatever type of loan you pay, it’s best to make all payments in full and on time. Paying less and above all, owing loan payments will end up costing more in the long run.
It is not advisable to wait until the end of the grace period to start repayment of debt. This is amongst the best tip for dealing with loan, especially if it is for education.
Nor is it appropriate to allow ourselves to skip payments. Because this results in accumulating debt in the long run. The most successful way of taking a loan is to draw up a payment strategy that will lead us to stay up to date and above all to pay it off as soon as possible.
3. Search for offers and save money
Just because you can afford to shop in higher-end supermarkets doesn’t mean you have to do it all the time, especially if you want to end up becoming rich.
Remember that the cost of the supermarket basket is a fixed monthly spend that will eat much of our salary.
Scratching on our monthly purchase in order to reduce the costs involved this is a way to contribute to savings. Going to cheaper brands or even making use of coupons and offers even though you think it is not necessary is a way to increase wealth.
4. Be financially prepared for emergencies
Life is full of unexpected surprises. And sometimes the unexpected can be costly. That’s why it’s crucial to be prepared for large unexpected expenses through an emergency fund.
While conventional wisdom speaks of saving enough money to cover ourselves for at least three months without a stable income, the more you save, the more freedom and security you will have in the event of an unforeseen emergency.
Putting a small portion of your savings into this contingency fund may seem like an excessive way to reduce your available capital on a monthly basis. But if the day comes when you suffer a layoff or an incident that requires a high financial outlay, your concerns will be less. And if it doesn’t, think you’ll be doubly happy because you’ll have all that money saved.
5. Avoid spending extra money
If your company grants stocks or bonuses and the first thing you think about is what you are going to spend it on, a trip, an expensive dinner or some other whim to give us, you may not be doing very well when it comes to achieving wealth.
While this additional income may seem like given money that has come to you, it should be considered earned money.
Spending it in small amount on ourselves might be fine. But it also makes sense to do something productive with this inflow of extra cash, such as adding to the investment portfolio or paying off debts.
Any gesture that seeks to favor savings and thereby increasing your bank account savings is the right way to approach wealth.
6. Contribute more towards to retirement
A pension system not always provides a secured financial future. Therefore it is more than convenient to start thinking about retirement as soon as possible.
Having a complement in the future to help increase pension is synonymous with a quiet and dignified retirement.
7. Having everything you need, but not everything you want
Living below our means is a good indicator of financial responsibility. Above all, it is an indicator that you will always have savings in bank account. And this is a fundamental step towards achieving a certain level of wealth.
When you live in this state of certain permanent savings, what you do is that you tend to cover all basic needs and control waste spend. You may indulge in additional luxury products from time to time, but are able to resist the temptation to spend at will.
This means that your finances will be favored through responsible money management, even if you have to give up the latest fashionable gadget or expensive car.
8. Enjoy promotions and salary increase
Having a stable job and a salary is good. But it is even better when you are rewarded for hard work and well done. A good career can quickly turn into a job with no future, if the salary doesn’t even keep up with inflation.
Making sure you get the periodic raise deserved is one of the basic elements of any decent job. If required. ask your superiors for a salary raise.
If this does not happen, and as time passes the possibilities of salary increase, promotions or compensations are scarce, the advice is to get down to work to be able to change company as soon as possible.
Otherwise, not only is it very likely that you will not get rich, it is possible that even your purchasing power will worsen over time.
9. Not spending too much on housing
Warren Buffett is one of the richest people in the world, but lives in a house he bought in 1958 for $31,500. The millionaire told the BBC: “I’m happy there. I’d move if I thought I’d be happier somewhere else.
Buffett, like all of us, doesn’t need an expensive mansion to be happy. And his modest home has allowed him to spend his finances on things he values more. If you spend less than the recommended 30% of our income on housing expenses, you’re on the right track.
With house prices rising and rents skyrocketing in main cities of various countries, this is perhaps one of the most complicated points when it comes to increasing the wealth.
10. Having an aggressive and diversified investment portfolio
The best investment that can be made in the long term are low-cost, diversified and aggressive.
You should not spend money by throwing it at unnecessary expenses or putting all the eggs in one basket for the worst to happen. It is also important to have the right mix of stocks and bonds according to the age and especially the amount of risk that can be calculated.
Although it should be noted that the worst investment that can be made in the long term is to have no investment.
11. No credit card debt
Credit card is an increasingly common form of financing. However, card debt is an enormous barrier to generating wealth.
Delaying credit card monthly payments can result in huge financial burden and lower your credit score. This will restrict the financial opportunities available, such as owning own house.
This is way every financial expert will recommend to avoid credit card debt. But if you’re already in debt, it’s best to get out of it as soon as possible. Once it is over, it is convenient to control spending and not to take bank loan again.
In general, it could be said that having wealth means not having to worry about paying your bills and aspiring to a comfortable retirement at a decent age. Wealth is attainable by all those with good financial habits, and you may already be on the right track.
Hi, I am Nikesh Mehta owner and writer of this site.
I’m an analytics professional and also love writing on finance and related industry. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business.