If we want to get rich, we have to say goodbye to the get rich quick mentality.
Other than winning the lottery, we can’t get rich overnight. Well.. unless you’re the secret sole heir to a multimillion empire and someone just knocks on your door saying you’re inheriting those fortunes. Then perhaps, yes, you can get rich overnight.
But this is not a drama, this is your life.
When I looked at the stories of how wealthy people got their money, almost all of them have worked for it for a long time, usually over a decade. It’s a hustle.
So in this post, I’ll be discussing the different ways on how to get rich slow and build a solid financial foundation.
The wealthy were constantly learning about their craft, working hard on their business, making investments, building good habits, and making the right financial decisions. All of these things they had to do every single day for years.
We have to be in the right mindset on this journey. It will be challenging and failures will be expected along the way. If the road to riches was so easy, then everybody would’ve been rich by now but unfortunately, that’s not the case.
If you think you got what it takes, then let’s get right to the post! ?
How To Get Rich Slow And Why You Need This Approach Instead
To start things off, I read a post on Twitter about a conversation between Warren Buffet And Jeff Bezos – two of the richest men in the world.
In a meeting, Jeff asked Warren this question: “Your investment thesis is so simple, you’re the second richest guy in the world, and it’s so simple. Why doesn’t everyone just copy you?”
Warren then answers: “Because nobody wants to get rich slow”
Even the richest of the rich understand that the majority of the people have a get rich quick mentality. A high percentage of the population doesn’t want to put in the time and effort.
I’ve done my research and read a ton of financial books. If you think you’re not part of the group above, then continue reading below because I’ve listed the best recommendations from the wealthy!??
1. Invest Early
Investing allows you to have a passive income in your balance sheet.
The earlier you start, the earlier you get to compound your money.
Although there will be ups and downs in the stock market, that shouldn’t worry you because your investment time frame should be for the long term.
Warren Buffet believes that if you’re not comfortable acquiring a stock for 10 years, then you shouldn’t even have it for 10 minutes.
Here are some tips that came from the man himself – Warren Buffet, when it comes to your investments, your savings, and market volatility.
When it comes to long-term investments, Warren recommends putting your money in a very low-cost S&P 500 index fund. According to BusinessInsider, index funds most often outperform actively managed funds.
Warren also believes that the habit of saving early is important. Trying to get rich quick is also an idea that should be changed immediately.
And when it comes to the stock market falling, don’t sell, just buy.
Just like in business, making money in the stock market takes time. So it’s better not to constantly check on your investments day to day. Instead, check on it every 6 months or 1 year.
If your reason as to why you’re not investing is you’re not familiar with the stock market, then I have the article for you. Let that article be your initial in-depth introduction to the stock market! ?
To add to your reading, in my blog entitled What To Invest In Your 20s, I’ve written 8 investments that you can do today to be in a better financial position.
2. Study More About Finance
If you think finance is just about saving, then you’ve only just scratched the surface of this topic. There are tons of subtopics in finance that can help us be in a better position in life.
These topics would be business and public finance. A subtopic that I really love talking and studying about would be personal finance. It talks about personal money management, saving, investing, and planning ahead financially.
Learning more about this topic allows you to avoid the common financial pitfalls like being in debt, uncontrolled credit card usage, no savings, and other things.
Although there’s no guarantee of whether you can avoid these things even if you study the topic, at the very least you have some knowledge of what to do to not fall for these traps.
People who lack financial skills usually spend their lives working for money and getting out of debt.
So a sure way to get rich eventually is to equip ourselves with knowledge on how to compound our money and where to place them.
3. Change Your Habits
To get rich slowly, we must change our daily habits. Change them to habits that will benefit us in the long run.
I’m not saying that you shouldn’t have any free time for yourself but rather it should be controlled. You can’t binge-watch a series on Netflix every day and expect to be rich, right? (It’s okay, I’ve been there done that too..)
The rich have that much wealth for a reason. They didn’t get their wealth by luck, they did it with hard work, focus, and excellent habits.
Here are some of the best habits that I’ve read and watched from successful people:
1. Writing Goals
Almost all wealthy people live their life with a purpose. They don’t just go with the flow in life. They write down small and big goals.
In an article by Business Insider, they wrote that Jeff Bezos knew from the beginning that he wanted Amazon to be an everything store. But before he could achieve that big goal, he needed to focus on his small goals first.
Small goals like how to keep the company running, how to fix the company being understaffed, and how to get Amazon out of his garage (Yep, Amazon started in Jeff Bezos’ garage!).
Writing daily to yearly goals should be a habit that you should form. It makes you move with a purpose in life.
The rich don’t wait for opportunities, they create them. Look out for opportunities and be ready to grab them immediately.
3. Constant Learning
No matter the status of the rich, they still manage to find the time to learn more about their industry or something new. They are always updated with new trends and technology.
To know more about the habits of the rich, I have written a blog post wherein I listed 22 habits of the rich that you should start doing!
4. Live A Frugal Life
Being economical with your money is a sure way to get rich slowly.
To live frugally doesn’t mean that you should be cheap. It just means your smarter with how you spend your money.
You spend your money on things that are important to you. I know this is a great way to boost your savings because I’ve tried this myself. I even made a post about it!
To live a frugal lifestyle isn’t easy. It requires a lot of patience and commitment. This is important because the ones who are rich now also sacrificed before to be able to save a few bucks to invest.
5. Eliminate Debt Fast
The goal of being rich can’t be achieved if you’re in debt constantly.
How can you be financially free when you’re drowning in debt?
According to MicroCredit Summit, more than 189 million Americans have credit cards, an average credit card holder has FOUR credit cards AND the average credit card debt per household is at $8,398. And the most surprising data, more than half of Americans (55%) are currently in credit card debt. ??
It’s a sad data to see but it’s the reality. This data just shows that it’s “normal” to have credit card debt because more than half of the US population has it.
But if you’re on a mission to be rich and amass wealth, you don’t have to be part of that data. Or if you are currently in debt, you have the choice not to be in it anymore.
There are many ways on how to get rid of debt. You can check out my 18 ways to get rid of credit card debt!
6. Manage Your Credit Card
One way to never get into credit card debt again would be to know how to manage it well.
People think that credit cards permit them to spend on things they can’t afford. And to be honest, that was my thinking too. That same logic led me to be in debt as well.
Once I got out of credit card debt, I promised myself that I’ll never be in that situation again!?♀️
Credit cards aren’t generally bad. I believe they provide convenience and rewards to responsible users. And in my opinion, consumers who have no control over their spending are the ones that give a bad reputation for these cards.
I even made a blog post to help my friends and readers avoid such financial burden. You can read it here – 15 Smart Ways On How To Manage A Credit Card Like A Responsible Adult.
7. Have A Diversified Portfolio
Being diversified allows you to lessen the risk of investing.
For example, you’re fully invested in “restaurants stocks”. But because of this pandemic, the government mandated all restaurants and malls to be temporarily closed. If that happens, you’ll see your stocks fall down for at least 40-50%. Why? Because no operations would mean less money that’s coming in the company.
But if you had stocks of Amazon, which probably benefited the stay at home movement, then your portfolio wouldn’t have dropped too much compared to putting all your eggs in one basket.
According to Fidelity, diversification is the practice of spreading your investments around so your exposure to one type of asset is limited.
A diversified portfolio gives the balance of risk and reward to different investment vehicles. The primary goal of diversification isn’t market gains but it limits the impact of the sharp down moves of a portfolio.
To check a detailed list of Diversified Portfolio Funds, read this post of MutualFunds.com
8. Start That Business
Nobody got rich by working 9-5 jobs without having other streams of income. The ultimate goal in life is to let money work for us and not the other way around. This saying is something that I constantly see when reading financial books.
That’s why you’ve heard stories about rich people when they were starting out, they were working a 9-5 job while building their business on the side (like Phil Knight, founder of Nike).
You can use your job as a means of funding your business and your lifestyle, but don’t let that be the end goal.
A side hustle will start from something small where you can still balance it with your day job.
But as you improve that business, it will demand more time from you. That’s the time you’ll decide if whether you should focus on your job or your business.
It’s important that you keep your day job first because businesses won’t make money right from the start. There will be a learning curve that you’ll have to go through, you’ll be trying out all sorts of things to know which ones work and don’t.
Since your business isn’t generating money right now, your day job will be there to supply you with money.
I highly suggest that you do that because that’s what I did and it has worked for me well!
Before quitting my day job to spend more time on this blog and to have more time on the things that I love, I made sure I saved up enough emergency fund.
A comfortable amount for me would be to have saved at least 6 months of expenses to my emergency fund.
Even though I had a big income before, it wasn’t healthy for me to work in that company anymore. I was supposed to only work 40 hours per week but I always end up clocking more than 60 hours every week.
I barely had any time for the things that I wanted to do. It felt like my soul and body were tired and I honestly wasn’t happy anymore. I always felt doing something for my own. So when I decided to quit, I made sure I was financially ready regardless of any emergency that might happen.
9. Start An Emergency Fund
It’s important to be financially ready when emergencies happen.
You don’t want half of your savings to be spent on medical bills.
Having an emergency fund can help you financially and emotionally. It’s hard to sleep at night knowing that if you won’t be compensated with a paycheck this month, you won’t be able to pay rent.
Saving for an emergency fund rids you of this worry. This fund can cushion any financial blow that you might encounter.
10. Budget Your Spending
Budgeting allows you to consciously track where your money goes.
The way I did it was using a spreadsheet. I decided to track my expenses using a spreadsheet because it’s a convenient way for me to do so. You can read how I tracked my expenses here.
But if you’re like Ramit Sethi who thinks that tracking every penny of your spending is overwhelming, then continue reading to know Ramit’s concept of conscious spending.
Conscious spending means to know exactly where to spend your money.
He came up with this strategy because he observed that most people spend on whatever things they like and just be okay with the bills like it didn’t take half of their monthly salary.
To have a solid conscious spending plan, he recommends that your income should be split into four categories: fixed costs, investments, savings goals, and guilt-free spending money.
Fixed costs would be your rent, loans, and groceries. Fixed costs would take up 50-60% of your income. Investments take up about 10%. Savings goals like a vacation could make up 5-10% and lastly, 20-35% of your salary goes to guilt-free spending.
This way of spending by Ramit Sethi allows you to pay for all the important things that shouldn’t be forgotten.
Then the rest of your salary will allow you to spend it on things that you love without having any guilt since you already paid everything that’s necessary.
Ramit believes that nobody sticks to their budget long enough. People tend to overspend most of the time.
So instead of answering “Where did my money go?”, conscious spending makes you answer “Where do I want my money to go?”
11. Get A Second Job
One sure way to fill up your bank account is to have a second job.
If you don’t have a business idea yet, you can focus for now on how to get your savings up.
One of the most booming industries during this time of pandemic would be the online space specifically online jobs.
Some of the most sought out online jobs right now would be Virtual Assistants, Digital Marketers, and Social Media Managers.
These three jobs are always in demand because businesses right now are putting more efforts in making their online presence known.
Why? Because most people spend their time on the internet! If that’s where the people’s attention is, that should be where the businesses should be.
If you’ve read my blog – The 6 Best Online Jobs From Home, you would know the job descriptions of those work. I’ve listed down what you need to do, what skills you need to have, and their average pay. So go ahead check it out! 😉
If you don’t have a profile to pass to online job applications, I have the blog post for you! I’ve written ways on how you can set up your profile to shine!
I’ve been working in the digital space for years already – trust me, your girl knows what these people are looking for 😉
12. Job Change
If you’ve been in the same job for years already and you think you’re being underpaid, why not look for another one?
Since a job can be a main source of income to us, being compensated with a low salary won’t help you to be rich. At least be in a job that pays well to help you get rich slowly as you work on your business at the side.
If I decided to stay in my first job, it would’ve taken me a looong time to save up an emergency fund. But because I took courage and have done all things necessary to search and land another job, my salary increased by 80%! Yes, that is possible.
I went from earning $48,000 a year to $85,200! I was happy that I took that leap of faith in finding another job.
That job change allowed me to save up money way way way faster than my first job.
Although there were times that I spent more money on things because I have more money coming into my account, I quickly recognized that mistake and solved that problem (the hard way, I must say…).
If you’ve always wanted to go search for another job, a job that will make you feel satisfied and compensated well, I’ve written a blog post on that topic too!
Now that you have the information on how to get rich slowly, it’s time for you to take action. I’m not quite there yet but I know that I’m slowly reaching that goal.
What you can do is to take up these things one by one. Start with having a budget then open up an investment account, or start an emergency fund.
Whatever it is, just start!