Can You Build Wealth with a Low Income?
Taking advantage of the opportunities afforded to us in the United States and building wealth is the American dream. While this sounds like something we can all achieve, it feels out of reach for the average middle or lower-middle-class individual. You may be surprised to know that you have the opportunity to build individual wealth if you use your money wisely. Taking control of your financial future is possible if you apply yourself and take responsibility for your financial acumen.
Start Saving Early in Life
If you start saving in your early 20’s, you can be a millionaire with relative ease. According to CNBC, if you start saving $14 per day in your early 20’s, you will be a millionaire by retirement. That is assuming a 6% return on investment which conservative considering that a healthy mutual fund allocation has performed at around 12% for the last few decades.
Be Financially Considerate
Too many people go through life paycheck to paycheck. They only concentrate on the bottom line which is to say, “how much more money to I have to spend until the next paycheck?” This is the definition of just getting by or living in the moment. In order to build personal wealth, you have to consider the future. Modify your spending behavior by asking yourself to define your personal needs and wants. Identify the money you spend on going to restaurants, movies, etc. and try to cut back.
Increase Your Income
Even if you do not have secondary education, you can increase your income through multiple methods.
Invest in yourself – Talk to your boss about classes or certifications that can increase your value. Increasing your bottom line is the simplest way to find the budgetary room to create wealth.
Get a side gig – Research online to find online side gigs. You can do this online for a few hours per week from home. Allocate that income to invest and save. Obviously, you could also get a traditional part-time job.
Cut back on expenses – You can essentially create income by cutting back on expenses. Do you really need to have Netflix, Hulu, Amazon Prime, and HBO? These automatic debits and recurring expenses can be a serious drain on your monthly budget. Cut back on the monthly “wants” and allocate that money to mutual funds.
Talk to a Financial Advisor
Contrary to popular belief, financial advisors are not just for rich people. Personal wealth comes in all shapes and sizes. In so many cases, building financial wealth is about being efficient with what you currently have, not dreaming about what you will never have.
Go online and research pro bono or low-cost financial advisors. If you are in South Florida, contact us at the Debt Relief Education Foundation. Elias Dsouza is a debt counselor and can help you gain financial freedom or plan for your future regardless of your income level. Contact the Debt Relief and Education Foundation for more information and take control of your financial future!