Not all of us are fortunate enough to come from a rich family. However, you don’t have to be a celebrity or trust fund baby to get rich. Opinions vary when it comes down to what it really means to be considered rich. However, the thing to remember is that being rich isn’t just about the amount of money you accumulate but also includes your net worth.
Net worth is the value of all of your assets minus the liabilities that you owe. Once you figure out your current net worth, you can figure out what you need to do to become rich. No matter what your current net worth is, don’t be discouraged because you can start working towards getting rich from nothing by following specific steps. Let's get into them!
1. Get your money mindset right
The mind is a powerful thing, especially when it comes to your money mindset. If you have a poor mindset you will continue making poor financial decisions keeping you living paycheck to paycheck. You can change from a poor mindset to a rich mindset by developing the right habits.
A popular way to get motivated and create a rich mindset is to create a financial vision board. You will put up pictures, motivational quotes, and financial goals on your board and hang it where you see it every day. This helps you to see your financial goals daily and can keep you motivated.
Another way to improve your money mindset is to read how to become rich from other financial success stories. When you see others succeed, it can help motivate you to achieve financial success.
2. Create a financial plan
The biggest step on how to get rich from nothing is by creating a financial plan. The quote “If you fail to prepare, prepare to fail” proves true, especially when it comes to finances. If you ask someone who has done it how to become rich, they will advise you to create a financial plan by doing the following:
Set financial goals
To get started on creating your financial plan, you will want to set up your financial goals. It’s best to set short-term and long-term goals. By breaking down your long-term goals into smaller steps, it makes it easier to attain. Also, writing down your goals makes you more likely to achieve them. It makes it easier to figure out how to become wealthy by setting financial goals.
Calculate the numbers
Remember, you need to figure out what your net worth is to know how to become rich. Knowing your starting point and how much or how little you have, you can figure out how much money and assets you will need to acquire to achieve your goal. Try this "save a million" calculator to see your numbers!
Pay off debt
Debt is expensive. Personal loans, credit card debt, and student loans can rack up thousands of dollars in interest payments. The secret on how to get rich from nothing is first becoming debt-free. By implementing a debt pay-off strategy, you can quickly pay off your debt and start working on becoming wealthy.
Start saving money
Ask a financially successful person how to become wealthy, and they are sure to answer with save your money. Saving money is a crucial step on how to get rich from nothing. You don’t need to make tons of money to save. You can even save money on a tight budget. Once you get into the habit of saving, you can start building your bank account faster than you think.
3. Get on a budget
Getting on a budget is essential when it comes to getting rich. Budgeting holds you accountable for all of the money you spend. When making a budget, you want to find a budgeting method that works best for you in order for you to stick to it. You may be surprised that many millionaires stick with a budget to stay financially successful!
4. Live below your means
The secret of how to get rich from nothing is to live below your means. By living below your means, you will spend less money and build your savings account. Just like with budgeting, living below your means will be a financial lifestyle you will apply to build and attain wealth. To live below your means, keep the following things in mind:
Curb your spending
Learning how to curb your spending will help you to live below your means. Cutting expenses on items such as eating out, expensive coffee, designer clothing, and impulse purchases can help you save money. Doing things like making a grocery list to keep you from wasting food can be a big step in curbing your spending.
By living frugally, you can reach financial freedom fast. Being frugal means being intentional with your spending. You prioritize your spending and find ways to reduce your expenses. Canceling cable, purchasing pre-owned instead of new, and selling items you don’t need are examples of being frugal. Being frugal can help you build your wealth.
Become a savvy shopper
You can save money shopping if you do it right. This is an essential step in how to get rich from nothing. You can use coupons and discount cards to save money on groceries. Shopping secondhand for clothes, cars, and other items can save thousands of dollars per year. You can save that extra money and use it to invest and start building your wealth!
5. Create multiple streams of income
Do you remember the saying, don’t put all of your eggs in one basket? The same goes when it comes to your income. The average millionaire has seven streams of income! By diversifying your income, you grow wealth faster and create financial security. For instance, if you have a side hustle in addition to your job, you have two streams of income rather than depending on one or the other. This is a smart money move because if you were to lose your job for some reason, you would still have some income coming in from your side hustle.
Income streams consist of your main job, side hustle, investment dividends, interest from savings accounts, rental properties, and more. There are many ways to create multiple streams of income. Creating multiple streams of income is a sure way on how to become wealthy.
6. Boost your current income
You can boost your current income to help in your new financial journey of getting rich. One way to do this is by asking for a raise at your current job. Be sure you have been performing well and have worked for the company for a while if you go this route. If you are a good employee, they may be willing to increase your income to keep you from looking for another job.
If you have been with your current employer for a significant time period and perform your job well, and they refuse to give you the pay increase you desire, it may be time to seek out other opportunities. Spruce up your resume and seek out an opportunity that will give you the pay bump you need in order to start getting rich.
You may also consider furthering your education in order to get a higher-paying career. Rather than going into deep debt with student loans for college, you can consider a high-paying trade career instead. Examples of trade careers are:
- HVAC Technician
- Dental Assistant
These are just a few examples of great career options with good pay. Trade Career Programs typically take less time to complete and cost less than college tuition.
7. Invest your money
A huge factor in how to get rich from nothing is investing your money. Even if you don’t have much money, you can still get started investing to start building your wealth.
Similar to creating multiple income streams, you will want to eventually diversify your investments too. This way, you are bringing in income from a variety of sources. Some investment types include:
- Real Estate
The sooner you invest, the quicker you will build your wealth. Don’t be too intimidated by investing; you can learn everything you need to start investing with Clever Girl Finance’s Book “Learn How Investing Works, Grow Your Money”! You will learn:
- How investing works
- What key pitfalls to avoid
- How to leverage investing on a modest salary
- Building a nest egg for your future
- Real success stories from other Clever Girl Investors
You will learn how to become wealthy from this fantastic book by learning how investing works!
Get started getting rich recap
Just because you may have lived paycheck to paycheck most of your life doesn’t mean it has to stay that way. You can achieve any financial goal you have by taking charge of your finances and starting now. Learning how to become rich can help you conquer your dream of being rich.
Remember the steps on how to get rich are to:
- Get your money mindset right
- Create a financial plan
- Get on a budget
- Live below your means
- Create multiple streams of income
- Boost your current income
- Invest your money
By implementing these key steps, you can set yourself up to have a rich, financially successful future!