How To Build Wealth: Consider these Alternative Options

How to build wealth

Building wealth doesn’t require special skills nor exceptional connection. Indeed, how to build wealth is public knowledge and easier than you think. Nobody needs to attend overprice events or attend high tag coaching sessions. although most people think the stock market is one of the most effective paths. There are many alternatives ways available for people to build wealth outside the stock market.

A. Investment

How to build wealth

1. Rental properties 

Rental investments can often yield some pretty good returns. In addition, you can benefit from any rise of the rental property also know as home equity.  However, you can location is fundamental, and setting up a good rental property management system is critical.

2. Real Estate Investment Trust (REIT)

A real estate investment trust is a company that owns, and in most cases operates, income-producing real estate. Typically, REITs are investment vehicles that own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels, and commercial forests. Basically, any major real estate investment project you see around you, chances are there is a real estate investment trust behind.

3. Franchise 

A franchise is a license that gives you the rights to run a business under the name of an already-established business. However, it can be pricey and the guidelines impelling especially for well-established brands such as Mc Donald, or Hilton. Nevertheless, if done well it can yield substantial benefits.

4. Peer-to-peer lending

also known as social or crowdlending, it connects borrowers looking for alternative f with lenders. It can also be a good way to build wealth. Moreover, you don’t need to join one. Yes, if you are good with your money, you can build your own personal network.

B. Lifestyle

How to build wealth

1. Don’t buy what you need, buy what is necessary

Always take 2 seconds before pushing the buy button to ask yourself one question: is this purchase really necessary? Can I live without it? Do you really need that brand new car? Yes, But is it necessary? No, it is not. I can live without it and I can keep my old car. You got the point. Resit your impulse. Discipline yourself.

2. Emergency Fund

Life is going to throw you a curveball someday. Maybe, not today. Perhaps, tomorrow. But believe me, it’s going to happen! You would lose your job, get an unexpected medical condition, wreck your cars, get a new baby. So, to make sure like a little ant, estimate your spending worth of six months and keep it in a saving account and don’t touch it unless it’s a real emergency.

To estimate it : take your uncompressed spend per month :

  • Rent
  • Utility
  • Food
  • Loan
  • Wifi
  • Entertainment
  • Plus 5% of your monthly income

Then multiple by 6. That is the money you need in your emergency fund.

3. Figure out your net worth

Calculating your net worth equips you with a visual reality of what you are currently worth.

Here is how you can do this:

Asset: Add

  • Your home’s value
  • Investment accounts,
  • Bank account balances,
  • and any other assets.

Liability: Substract

  • Loans
  • Debt, including student loans, mortgages, and credit card debts.

C. Discipline yourself

How to build wealth

1. Budget

Always have a budget. One of the reasons why people find themselves in so much financial trouble is because they don’t have a budget. But most importantly stick to your budget. It is a painful exercise but worth every second you put in.

2. Cut your credit card

You don’t need a credit card to be happy. Actually, just buy what you can afford. Obviously, do your best effort to shield yourself away from a credit card. Thus, you should try to live frugally as much as you can. Ultimately, you will find many alternatives ways to buy and spending money without necessarily utilizing a credit card. That is because, keeping your credit card away from you would help you build wealth. But, it would definitely help you avoid artificial money trap. Sure a credit card, helps you build your credit score. But you can absolutely, live without and build considerable wealth.

Do you have any additional alternatives?  Please drop a line below and share with the community

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