By Michelle Wanjiku
You may think that the more money you make the wealthier you become but this is not the case. When it comes to building wealth, you will need more than just a hefty paycheck.
It might seem like the more you earn, the easier it becomes to live in a big house, drive a good car, eat at fancy restaurants but this doesn’t mean that you are wealthy.
Whether you become wealthy or not depends on your financial habits. How do you spend the money you make? Are you investing?
There are some habits wealthy people have that set them apart from everyone else struggling financially. Here are some of those habits you need to start cultivating.
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1. Have multiple streams of income
It’s near impossible to achieve financial freedom on just a single source of income. Wealthy people ensure they have more than one source of income. You never know what might happen. You could lose your job and end up having no income at all. But with multiple streams, you have something to fall back on.
Try and find a way to build passive income. Be it through starting your own business, freelancing, investing in stocks or something else. This will ensure that no matter what happens you will not have to go through a time when you have no income at all.
2. Live on less than you make
Truly wealthy people don’t feel the need to show that they have the money. A good example is Bill Gates. Even though he is worth over 90 billion dollars, his house is worth less than 130 million. It might seem like a lot but compared to his worth he could choose to get a house worth a lot more.
So why would you decide to pay rent of 40K when your salary is 70K per month?
Wealthy people live way below their means and that is how they manage to build their wealth.
“Poor people spend money and save what is left. Rich people save their money and spend what is left,” says Jim Rohn an entrepreneur.
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The less you spend of your income, the more you have left to invest and build your wealth. You need to cultivate a habit of living below your means to achieve financial freedom.
3. Make your money work for you
Contrary to popular belief, saving a lot of money won’t make you wealthy. It is an important step in building wealth but it should not be your only strategy.
Investing is a good way to make your money work for you, in that you manage to earn money from your own money.
The wealthy earn interest as opposed to just paying interest.
You need to find ways in which the money you have put away can increase without you having to do too much about it.
The whole point of building wealth is so that you can benefit from it. You need to invest in yourself, take the classes you need to better your business or career, take good care of your health and so on.
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When it comes to money; your goal should be to build wealth and not just to make a lot of money. It doesn’t matter how much money you are earning now, you can start building your wealth with whatever you have. You just need to ensure that you are making the right financial decisions.