You can inherit wealth, marry for money, or win the jackpot.
Other than that, there are only two possible ways to increase your net worth. Net worth is just the difference between how much you’ve earned and how much you’ve spent.
So you can either save more by being frugal, or you can try to earn more. If you want to become richer, you have to increase that earnings to savings gap. Earning more alone won’t help – how many famous bankruptcies have you heard of? If every pay rise and windfall is spent on new yachts, you’ll still be broke at the end of the day. On the other hand, even if you don’t earn that much but you live well within your means, your net worth will be increasing.
However, while saving is important, there is a limit to how much you can save. You can never spend less than $0, and in reality, there’s a minimum spend that you have to make each month for absolute essentials, as well as some little splurges. Frugality will help, but frugality alone won’t help. That’s why you also need to focus on the other side of the equation. Saving potential is capped, but income can theoretically be unlimited.
Here’s a quick summary of all the ways you can earn more money:
- Perform better in your existing career.
Most of us already have existing careers, and while it may be sexy to dream of quitting the job and sailing out into the sunset, what we’ve already got is usually the most realistic way to make more money. You’ve already got existing skills for this job, and clearly people are willing to pay someone with those skills. An easy, low-risk and cheap way to profit from that existing skill and job base is to get better at what you’re already doing. Do your job better, get promoted or move to a new company, earn more money.
This was always the traditional way of thinking. These days we have a more modern spin on it, we network more, change jobs more frequently, and upgrade our skills more often. At the core, however, we’re just getting better at out existing career – whether it’s flipping burgers more efficiently and becoming kitchen-hand at a better-paying restaurant, or building a better software and getting a promotion.
Of course, doing this alone won’t help. But while it’s not glamorous, it is a good place to start. - Invest well
Over the long run, investments will make you “passive income”. This term has been misused a bit, but essentially, you should be putting your money to work for you – getting interest, dividends, or appreciating through maybe share or housing price increases. Personally, I believe in a slightly more hands-on style of investing, and educating yourself about what you’re getting into: the recent crash has made us all aware of the need for awareness. This is an incredibly diverse topic and there are lots of resources available on the web for interested investors. - Do additional work
Can you fit more work into your day? If you can, you can probably earn more money. The scientific term for this activity is “the side hustle”.
Examples of side hustles include part-time work at another employer (assuming there are no conflicts of interest), and small businesses like baby-sitting, pet-walking, pool installation, crafts, and so forth. - Seek a new career
This is the most glamorous of all possible solutions, and the one that attracts most attention.This is also the riskiest of all the possible paths, which is why very few people choose to go down this.
A new career means a great amount of education is required, which is almost always time consuming and expensive. If you’re seeking a job, it means a whole new round of paying your dues. If you’re starting a business, it exposes you to business risk.
However, this is often the most fulfilling of options. Many people choose a new career for the work that they’ll be doing, not the money. This has the effect of enabling them to work longer hours and more intensely – often leading to greater wealth!
The process of accumulating wealth, when broken down, is simplicity in itself. Success is 99% perspiration, and though the path seems simple, sticking to it is quite difficult.
Related Posts
No related posts.
No comments yet.