Method 1: Become a deposit giant
1, sit down and make a budget This is the starting point. If you don't save money, you will have no money. If you don't know what you have and how to spend it, you can't save money. You may already know some common sense about budget-if you don't, just click on the link above-so we won't go into details. You should remember that the overall goal is to make a reasonable budget that you can stick to and benefit from, which is an important step towards financial independence.
2. Set aside a part of your salary. How much to keep is up to you. Some people swear to save 10% to 15%, while others may save more. But the sooner you start saving money, the longer you save it, the less you need to pay. So start early, even if your goal is only 10%. Another rule of thumb is the 8x rule. This rule of thumb shows that by the time you retire, you'd better have saved eight times your retirement salary. According to this standard, you'd better save money equivalent to your salary at the age of 35, three times as much as at the age of 45 and five times as much as at the age of 55.
3. Make good use of "spending money for nothing". Few things in life are obtained for nothing, let alone money. There is too little money. In fact, you will rob money like a cow. Here's how to get something for nothing: Employers may join the 40 1(k) plan. In other words, if you put a dollar into the 40 1(k) plan, your employer will take another dollar out of their pocket and put it in. Suppose you invest $2,500 in the 40 1(k) plan, and your employer will also invest $2,500, so it is $5,000. This is the closest thing to "white money". Make good use of it.
For more information about the 40 1(k) plan, please read How to Build 40 1(k). The 40 1(k) plan is a retirement account, and the money you put in can be taxed later, which means that you won't pay taxes before a certain period of time, or you won't pay taxes at all. .
4. Deposit the money into Ross IRA as soon as possible! Roth IRA, like 40 1(k), is also a retirement account, which can earn income or be tax-free. There is an annual limit ($5,000) for personal investment in IRA, but your goal should be to pay this limit every year, especially when you are in your twenties and thirties. Ross IRA can help you accumulate wealth effectively. If a 20-year-old pays $5,000 a year for 45 years, with an annual appreciation of 8%, amazing things will happen. When he retires, his total account will reach $654.38+$9300. This is $654.38, which is $700,000 more than the amount you deposited in your time deposit account.
Why can Roth IRAs create such amazing wealth? Through compound interest. This is the compound interest effect. Banks or other institutions pay IRA interest, but you still put it in the wealth pool without taking it out. So when you pay dividends next time, you can not only get interest on your own money, but also get interest on interest.
As with other ways to save money, the sooner the better. If you save $5,000 at the age of 20 and then stop paying, it will increase by 8% every year, and after 45 years, it will become $65,438+$6,000. On the contrary, if you save $5,000 at the age of 39, it will only become $40,000 when you retire. So act early!
5. quit credit cards. Credit cards have incomparable advantages in some occasions, but at other times they may form your bad habits. This is because credit cards encourage people to spend money they don't have, and extend the anxiety of the present to the future until there is nowhere to hide. Not only that, scientists have found that the brain thinks differently about handling credit cards and cash. A study shows that credit card users spend 12% to 18% more than cash users. McDonald's found that customers who pay by card spend an average of $2.50 more than those who pay by cash. Why is this?
We don't know the exact answer, but we think that cold real money is more "like money" than credit cards, perhaps because people don't have physical money when they swipe their cards. In a word, credit is like a monopoly currency-it doesn't really exist in a primitive part of our brain.
6. Save your tax refund, or at least spend it wisely. When the government announced the tax rebate at the beginning of the year, many people began to go on a shopping spree. They thought, "Hey, hey, Ricky. Why not spend it on entertainment? " Although sometimes it is completely acceptable to do so (under certain conditions), it will not help you accumulate wealth. Don't spend the tax refund, try to save it, or invest it, or use it to pay off your large debts. It may not feel as good as buying a new set of reclining chairs and new kitchen utensils, but it may help you achieve your future goals.
7. Change your view on deposits. We know it is difficult to save money. It's too difficult. Because of its nature, saving money is to postpone the fun of the present to the future, which requires courage. You can turn your head and look at this process from another angle. You can motivate yourself to become a better piggy bank. Here are some ideas: whenever you want to buy something big, convert the money you spend into your hourly salary. Therefore, if you take a fancy to a pair of shoes for $300, but your hourly wage is only $65,438+02, that's 25 hours of work, or more than half a week. Are these shoes worth so much money? Sometimes it may be.
Refine your savings goals. Don't set a goal of saving $5,500 a year, you should think about it from the perspective of months, weeks or even days. Think of it this way: "Today, I want to deposit $65,438 +05." If you do this every day, it will be $5,500 a year.
Method 2: actively create wealth.
1. Talk to a qualified financial advisor. Have you ever heard the saying "money should be spent before making money"? Well, for a good financial adviser, that's what they do. It costs some money to hire a financial adviser, especially a good one. But the goal is to make her finally "earn" more money for you than the labor cost she paid. In this way, it is quite cost-effective. This is a way to accumulate wealth. A good financial adviser not only manages your wealth, but also does more. She will teach you investment strategies, explain short-term and long-term goals, help you build a rational and healthy wealth relationship, and tell you the right time to spend hard-earned money.
2. Decide whether to develop your portfolio. Investment is of great significance for accumulating wealth, not just maintaining the level of wealth. There are too many investment channels. If you want to invest in stocks, financial advisers will guide you on the right path. The following are some investment channels that can be considered: consider the investment index. If you invest in the S&P 500 or Dow Jones, what you are doing is equivalent to betting on the success of the American economy. Many investors think that the investment index is a relatively safe and wise choice.
Consider investing in mutual funds. A mutual fund is a collection of stocks or bonds and the risks are shared. Because they don't invest all their money in one or two stocks at a time, the risk is smaller.
Don't try to do short-term speculation in the day. You may think that you can seize the highest and lowest points of the stock market every day to buy and sell, but you will fail once and prove you wrong. Even if you have a solid business foundation, industrial health or the essence of value investment, what you do in stock selection is essentially speculation or gambling, not investment. Gamblers are always winners. Many academic studies show that short-term speculation day after day is unprofitable. Not only do you have to pay a lot of transaction fees every day, you may only see 25% to 50% of the income-if you are lucky. It is difficult to accurately grasp the timing of the stock market. Those who choose good stocks and hold them for a long time usually earn more than those who like to toss and turn.
4. Consider investing money in foreign countries or emerging markets. For a long time, American stocks and bonds have made the most profits. Now, some economic sectors in emerging markets provide better growth space. Investing in foreign stocks or bonds can make your portfolio more perfect and reduce your unexpected risks.
5. Consider real estate investment-but there are preventive measures. Investing in real estate or real estate can greatly increase your wealth, but it is not always the case. Those who thought that real estate would rise forever fell into the Great Depression in 2008. People soon found that house prices plummeted and credit was unbalanced. But when the market stabilized, more people jumped into the real estate market and tried to accumulate wealth. If you want to invest in real estate, here are some tips: consider buying a house that you can afford, so that you can get equity instead of paying rent to rent a house. Installment loan is the most expensive expense in your life, not one of them. But this should not stop you from buying a house, if your financial resources allow. Because, why do you give the owner hundreds of dollars, but you can't get the property, but you have to build a property that will belong to you one day? This method is feasible if your financial resources allow you to own a house (repair and maintenance also cost a lot of money).
Be careful when changing hands! Be more cautious about the transfer of houses. Turning over refers to buying a house, upgrading it with as little money as possible, and then putting the renovated house on the trading market again to make a profit. Houses can be changed hands, sometimes with great profits, but it is also possible that houses are hung on the market for a long time and become a bottomless pit for investment, or buyers are willing to pay less than the cost.
Method 3: Become a smart consumer.
1, live within your means. This is the most difficult lesson in personal finance. Living within our means means improving our living standards in the future. Live beyond your current economic level, and your living standard will be lowered in the future. Most people feel better about "promotion" than "reduction".
Don't buy expensive things on impulse. When you see your best friend driving a new car into town, you may have a desire to buy it, but it is half emotional in your mind, not half rational. If you feel the urge to buy, but your reason tells you not to buy, you should do this: set a mandatory waiting period. Wait at least a week, or you can wait until the end of the month when you know more about your financial situation. If you want to buy that thing in a week or more, it may no longer be an impulse.
Don't go to the grocery store when you are hungry. For god's sake, make a list. Some studies show that hungry people will buy more things than they need when shopping, and they will also buy foods with higher calories. So you should go to the grocery store after eating and make a list. Then you will buy what you need, not what you think you might need.
4, online shopping, bulk purchase! Don't buy a box of tissues at a time that you think will last for a month. Be smart and buy one for a year. Retailers give high discounts on bulk purchases, which will save you money. If you are going to choose the goods you like, check the price online before you buy them on the spot. Online prices are usually cheaper because retailers don't have to pay labor costs or store costs-they just have to pay inventory costs.
5. Bring more lunch to work. If you spend an average of $65,438+00 on lunch, the cost of lunch is only $5, which means you can save $65,438+0,300 a year. This is enough for you to cope with unemployment or emergency. Of course, you can also balance your frugality by socializing, so occasionally squeeze out some time and money to have dinner with your colleagues.
If you have installment payment, refinancing will save you a lot of money. During the loan period, refinancing can save you hundreds of dollars every month. Especially if your installment payment is adjustable interest rate (ARM), you have to pay higher interest, so you should consider refinancing.
Method 4: Improve skills and accumulate wealth.
1, make money by studying. If you feel that your skills limit your income potential, you can consider going back to school. Studying in vocational schools and community colleges can provide you with more opportunities to make money. If your interest is in the computer field, many community colleges offer computer grade exams. Tuition and miscellaneous fees are usually not so expensive, and the training time is shorter than the traditional level training, because you can get a technical or skill degree without taking English, mathematics, history and other courses! You can also get an extra two years of online degree qualification and take many courses.
Moreover, it should be noted that a university degree should not be underestimated. After all, what many employers want to see is that you can finish your studies, and you can motivate yourself to improve yourself, while others just want that piece of paper.
2. Continue to communicate with peers. Don't be afraid of office politics; It is good for you to help others in exchange for their help.
3. Support community cooperation. Pay close attention to community work, such as local business committees and small business associations. Volunteer in these places, communicate with members and give back to the community. Just like socializing, you don't think about how you have influenced others' lives or how others have influenced yours. It's always good to pull more lines when fishing.
4. Learn to use your money. After learning these stingy and thrifty "exquisite dance steps", it is also very beneficial to remind yourself to spend money occasionally. Because after all, money itself is not the ultimate goal. It is the way to the ultimate goal, and its real value lies in what you can buy with it, not the amount accumulated when you die. So, learn to enjoy the simple and not so simple pleasures in life once in a while-a ticket to Verdi's play, a trip to China, and a pair of leather shoes. In this way, you can learn to enjoy life while you are alive.
Tips for reading-yes, reading. Read everything, understand what is happening in your field (trends, new concepts), and understand what is happening in the world. The economy is global, and anything that happens in the world will affect your field.
If your company offers a 40 1k plan, then hand it in. The company will always match your share according to a certain proportion. This is "wasting money"! If you want to get the money, you don't have to do anything but get the money. Nothing is simpler than this.
For investment fields that you have never touched or forgotten to "water", the seeds of wealth planted need to take root (investment that keeps profits).
Learn to make a profit by investing.
Develop your knowledge: fertilize your soil, otherwise it will become fallow (lose its goal); Take part in more training and education in the fields you are interested in.
Warning not to spend your savings for your desires and greed.
Don't work for the minimum wage-after all, if it is legal, they will pay less.
Don't forget to plant your "wealth seeds", otherwise you won't have "harvest".
Investment advice: Don't eat seeds (no harvest) or all your eggs (no chickens). Your hen will get old, and you will have no income!
If you invest 40 1k or something like that now, whatever you do-don't borrow money. The consequences are very serious.