Many people dream of being rich, though what that means varies widely among people of different backgrounds and experience. To some, it means never having to worry about expenses. For others, it is not working so many hours. Others define it as complete financial independence.
No matter what your definition of “rich” is, experts offer suggestions for how to get on the road to greater wealth.
What Does It Mean To Be Rich?
“Being rich means having time freedom and location freedom, to do the things that matter to you,” said Andrew Lokenauth, CEO of Fluent in Finance LLC. “Wealth often comes first from being frugal. Many millionaires are wealthy because they know how to keep and invest their money — and not spend it on unnecessary things.”
Beyond frugality, Kyle Kroeger, finance expert at The Impact Investor, extends the definition of rich to mean “someone (who) regularly earned enough to be far from troubled paying their fixed expenses such as rent, electricity and other utilities, car maintenance costs, health insurance and educational expenses.”
Pay It Off
Rich people know debt holds you back.
“If you’re looking to get rich, stop carrying so much credit card debt,” said Matt Dixon, RFC partner and financial advisor at TruNorth Advisors. “You need to organize your debt and start attacking the lowest balance first by paying as much as you can on that card all while maintaining minimum payments on your other cards. This doesn’t mean you should never use a credit card, but make sure you use it responsibly and make your monthly payments.”
Watch Your Risk
Additionally, consider whether you’re playing fast and loose with your finances, because, Dixon said, “Wealthy people try not to take on too much risk and are very detail-oriented. Be selective about the opportunities you are going after. Make sure your portfolio is diverse. Try investing in real estate or land. A diverse portfolio can help you hedge against the ups and downs of the market.”
Start Your Own Company and Sell It Later
If you’ve got an entrepreneurial spirit, consider starting a company you can sell for bigger bucks, said Jared Bauman, co-founder and CEO of 201 Creative LLC, a digital marketing agency.
“To be more successful,” he said, “it is preferable to come up with an innovative solution to a specific problem in the market and start a business around it. … However, if you succeed, you’ll reap enormous rewards. This is a common practice among wealthy individuals.”
Participate in a Startup and Receive Stock
Startups still abound, and they’re always seeking new blood.
“If you can acquire equity positions in one or more start-up companies, you could make a significant monetary gain if the company thrives and either floats or is sold to a larger enterprise,” said Daniel Carter, SEO manager of Skuuudle.
While it is a small number of them that succeed on this scale, he pointed out, “On this basis, early employees at Apple, Google and Microsoft became millionaires.”
Focus On Your Retirement Plan
Retirement accounts, which are typically invested in the stock market and thus more likely to earn good returns, are a good way to build wealth for later on.
“If your employer has a retirement savings program for employees, make an effort to contribute to it,” said Francis Locknear, founder of TheCostGuys.com. “Employers will contribute to 401(k) plans the same amount that you contribute toward your account. You can consider an IRA if your employer doesn’t offer you a retirement plan.”
Try Affiliate Marketing
Website owners, social media “influencers” and bloggers use affiliate marketing to promote a third-party product by providing a link to it on their site or social media account. This earns you income that can add up over time, said Adam Wood, co-founder of RevenueGeeks.
“Although Amazon is the most well-known affiliate partner, other big brands include eBay, Awin and ShareASale,” Wood said. “Instagram and TikTok, in particular, have grown in popularity among those trying to build a following and market their products.
“Affiliate marketing is seen as passive since, in principle, you may make money by simply putting a link to your website or social media account.”
Increase the Amount You Save
With inflation and interest rates on the rise in 2022, it will be even more important to manage your personal budget, said Shawn Plummer, CEO of The Annuity Expert.
“Set the target of increasing the amount you save in 2022,” Plummer said. “You can then use this to either pay down high-interest debt, contribute towards your retirement or simply have the assurance of having more savings in the bank. To do this, consider where you can reduce expenses so you can build up more savings.”
Invest In REITs
Another investment possibility is a real estate investment trust (REIT), which “is a fancy moniker for a firm that owns and manages property,” according to Gerrid Smith, CEO and founder of Property Tax Loan Pros. “REITs have a unique legal structure that allows them to pay minimal or no corporate income tax if they distribute the majority of their profits to their shareholders.”
You would get whatever dividend the REIT pays out.
“The best REITs have a track record of increasing their payout on an annual basis, so you might have a steady stream of dividends over time.”
What About NFTs?
On the more controversial side of wealth-building are non-fungible tokens (NFTs) — a very new, non-tradeable digital product made possible by blockchain technology.
“Non-fungible tokens and the Metaverse offer the best chance to create, grow and maintain wealth,” said Harriet Chan, co-founder and marketing director of CocoFinder. “At the moment, minting NFTs, holding them and selling off at a higher price is one of the most feasible ways to grow your wealth in 2022.”
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