Book yourself a place in the millionaires’ club by the time you turn 30 by following these simple tips and tricks.
Want to become a millionaire by the time you turn 30? Sounds like an impossible feat, doesn’t it? Actually, it isn’t. It all depends on how early and how wisely you plan your finances. Smart financial decisions at an early stage in your life will surely book you a place in the millionaires’ club at a later stage.
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So, are you making smart decisions? You may be keeping money in your bank account (perhaps a piggy bank)? Those are a couple of ways to save money. But you’re seriously missing out on the compounding effect of time. And, just storing money in a safe place won’t really help you become a millionaire, either!
Here are a few tips which CAN (we’re stressing on this word!) help you become a millionaire by the time you turn 30.
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Being frugal is the key
Naah, naah! We’re not asking you to deprive yourself of things that you want or enjoy. Being frugal is not like dieting – you don’t have to deny yourself. Don’t cut your budget to shreds, instead be a smart spender. Living frugally doesn’t mean you have to become a cheapskate. It means you make your all your financial decisions based on your needs for today and tomorrow.
Basically, if you keep the bigger picture in mind, it becomes easy for you to live frugally. Set your goals – short-term, medium-term and long-term – beforehand. This will help you become careful about spending your resources because you have goals to reach.
Although, frugality is going to slow things down a tad bit. For example, you may really want that fancy SUV, but you know you can’t afford it now. So, instead, you focus on saving and put off the purchase till you have enough cash to make the purchase.
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Start investing
You’re young. And you have the advantage of time on your side. So, stop holding onto those conservative beliefs about investing. Don’t let your money vegetate in a Savings Account, your piggy bank, or under your mattress.
Okay, having a Savings Account is a good start to saving money (we agree). But, you must aim to compound your money. This is possible only if you start investing in different investment instruments. You have to focus on creating a balanced investment portfolio. When it comes to building your portfolio, diversification of assets is important too. A well-diversified portfolio is essential for accumulating wealth.
Money management
It is necessary to manage your money – how much is coming in and how much is going out – if you want to grow your money. If you have a holistic idea of your finances, then it makes it easier for you to save money.
How to manage your money? Well, when it comes to money, there isn’t a shortage of ways to spend it. Don’t stop yourself from spending on things that you love – like the occasional dinner at the nearby Chinese restaurant, your gym membership, etc. However, you need to set a limit to your expenditure. Creating a budget can help with this. You can follow the 50/20/30 budgeting rule for maximum savings.
What is the 50/20/30 rule? According to this, every earning individual should allocate 50% of their income towards paying bills, rent, monthly groceries and other essentials. 20% of their income should be their savings. And 30% of their income should be allocated for lifestyle needs and wants such as phone recharges, shopping for clothes, eating at restaurants, etc.
Increase your income
It is very important for you to increase your take-home income if you want to become rich. Your savings and investments are directly proportional to your take-home income. How will you fund your savings and investments if you aren’t making enough money?
You may have a stable job but that doesn’t mean that you sit there idle. You need to focus on increasing your income. And the best way to do this is to become competitive and aim to climb up the ladder. You should constantly improve yourself to get yourself a better position (and higher pay!).
Simple steps, right? Though we can’t guarantee that you’ll become a millionaire (that requires some luck too), you’d surely be wealthy enough to put Uncle Scrooge to shame.