Many people mistakenly think that wealth-building strategies are best left to those with cash to spare already, when in fact they are just as valuable for those starting from scratch. Remember, everyone started somewhere.
Let's start with a simple question... is building wealth important to you?
If you answered yes, it's important to realise that it's not just something to focus on while you've got something to lose, but a mindset to make a habit no matter where you are on the financial ladder. By incorporating the following habits into your life, you can make sure you're on track for financial success, no matter where you are starting off.
1. Every little bit counts
This is as true in times of feast as it is in famine, and while it seems simple, it's a way of thinking that will quickly pay off. Many of the world's richest people save when and where they can, even when their bank balances can surely withstand a little extravagance. Take Prince Rainier of Monaco, for example. He used to buy all of his socks in the same brand and colour, so that when he lost one or wore one out, there was no need to buy a new pair as a replacement. Basically, it's following the saying, take care of the pennies, and the pounds (or dollars) will take care of themselves.
2. Invest in yourself
The old adage "pay yourself first" is a rule to live by, but one that many fail to do. Business magnate Warren Buffet knows a thing or two about building wealth as he was the most successful investor of the 20th century, and he swears by this habit. "Don't save what is left after spending", he says. "Spend what is left after saving".
3. Don't underestimate a bargain
Another pearl of wisdom from Warren Buffet is his understanding of the difference between price and value. "Long ago, Ben Graham taught me that price is what you pay; value is what you get. Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down," Buffet says.
Learning how to spot true value and invest wisely in it is a skill that will see you make smart financial decisions.
4. Always think a step ahead
Ideally, a plan for what you want to achieve in the long-term should inform all your financial decisions. Of course in practice it's not always that easy, but formulating a clean understanding of your long-term goals is an excellent way to build wealth.
According to Financial Mentor it's one of the best ways to plan for an early retirement. Plans and goals provide the necessary context to focus each and every decision in your life with purpose. Time spent writing goals and building a step-by-step plan to achieve those goals is an investment in your future. It reduces wasted effort, increases efficiency, produces amazing results, and best of all, costs you nothing.
Finally, even if you're starting from a low financial base, seeing a financial adviser can help you set a clear wealth building strategy.
This information is current as at 23/11/2014.
BT Financial Group - A Division of Westpac Banking Corporation. This document provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This information does not constitute financial advice. It has been prepared without taking account of your objectives, financial situation or needs. Because of this, before acting on this information, you should consider its appropriateness having regard to your objectives, financial situation and needs. Information in this blog that has been provided by third parties has not been independently verified and BT Financial Group is not in any way responsible for such information.