Content of the article
- Understand what it means to be rich
- Deal with your financial situation
- Create a monthly budget
- Cultivate your financial education
- Dare to invest to get rich
- Seek to earn more
Many people think that becoming rich is a privilege reserved for those who were born into a very wealthy family. Or those who were lucky enough to earn a lot of money in an unexpected way. And I was one of those people until recently.
But it turns out that the reality is quite different, and that the rich or millionaires are often not the ones you think of.
In his book The Millionaire Next Door, Thomas Stanley presents a study of several years that he conducted on people whose fortune is greater than 1 million dollars.
He showed that between 80% and 92% of millionaires became millionaires from scratch, i.e. without inheriting a fortune from their family or even winning the lottery.
Most people who are not rich think that millionaires wear expensive clothes or watches and other expensive status symbols. We have found that this is actually not the case.
Thomas J. Stanley – The Millionaire Next Door
The good news? You too can increase your chances of getting rich by making the same efforts that the vast majority of successful people have made.
And if you're wondering how to get rich, check out the 5 key steps to follow that I present in this article.
How to get rich from scratch
It may seem logical, but many people tend to ignore it. You're financial situation, and therefore your ability to become wealthy, depends greatly on your level of financial education.
Yet, this is not at all what most people have in mind when they talk about "getting rich"...
We want to become rich in just a few moments, thanks to a magic formula that would allow us to completely change our financial situation "in two days".
But deep down, you know it. Unfortunately, there is no miracle solution to become rich without doing anything or to become a millionaire overnight.
However, many people have succeeded in building their wealth or achieving financial independence without being bankers or traders on Wall Street.
Their secret? Bad news: it's a lot less exciting than you might think.
It's all about precise management of their budget and personal finances. Find out in detail.
1. Understand what it means to be rich
This is already the first hurdle.
How can you become rich if you don't even really know what it means?
And there are several problems here.
The first is that the term "be rich" is quite pejorative. Especially in French. It suffers from a rather cheesy, if not downright megalomaniacal, image.
And the second one, quite related to the first one, is a false image of wealth, especially by the media and on social networks.
When we imagine what it is to be rich, we imagine this:
But in reality, your next-door neighbor could very well be rich without you having any idea. Because most of the time, contrary to what you might think, wealth is not really visible from the outside.
They don't buy Rolexes, luxury cars, or dresses in head-to-toe Chanel. And that's how they've managed to achieve financial security and independence.
If you earn a good salary every year but spend it all, you don't get richer. You just have a high standard of living. Wealth is what you accumulate, not what you spend.
Thomas J. Stanley – The Millionaire Next Door
So, looking for "how to get rich" is a bit of a waste if you don't know what getting rich means.
At what point would you consider yourself "rich"? A certain number in your bank account?
That's why it's much more interesting to set specific financial goals instead, which correspond to what's most important to you in life.
Do you want to retire at 40? Be able to work comfortably full-time so you can spend more time with your family? To be financially independent so you can work for a cause you care about, even for free?
Because wanting to become rich just to become rich will ultimately have little chance of satisfying you.
2. Deal with your financial situation
If you're reading this article, it probably means that you don't have enough money to consider yourself a rich person.
But the financial situation of everyone reading this article right now is probably very different.
Maybe you are currently struggling to pay your bills, or recovering from a recent financial emergency.
Maybe you're earning a decent salary and regularly managing to put money aside, but can't figure out the next step to make the most of your money.
Maybe you'd like to start investing, but have no idea where to begin.
Whatever your situation, if you're looking for a way to become wealthy, taking stock of (and accepting) your financial health is key to moving forward.
Honestly acknowledging that you're not making the best decisions with your money today can be difficult, but it's also essential to improving yourself.
3. Create a monthly budget
It's also one of the revelations presented in The Millionaire Next Door: an overwhelming majority of those who have become rich manage their monthly budget with an iron fist.
Wealthy people have become millionaires by budgeting and controlling their spending, and retain their wealth in the same way.
Thomas J. Stanley – The Millionaire Next Door
We can't say it enough: having a monthly budget is essential to taking control of your money.
only does it allow you to track how much money you have at the end of the month and how much you manage to put aside, it also allows you to identify the expenses where you are wasting money each month and where you could be making significant savings.
4. Cultivate your financial education
Like everything else, knowing how to manage your money well is something you have to learn.
No one is born with the innate talent to know how to control their personal finances. It will inevitably require a little curiosity on the subject.
And it's often much easier than it seems.
One way to learn about personal finance is exactly what you're doing right now: browsing blogs and articles that aim to help you manage your money better.
Another method I highly recommend is to read books about money. There are hundreds of books, for all tastes, that will allow you to better understand this field in an interesting and practical way.
I especially recommend :
- Rich Dad Poor Dad by Robert Kiyosaki
- Your Money or Your Life by Vicki Robin
5. Do you invest to get rich?
Knowing what to do with your money and having knowledge about personal finance is essential. But it will get you nowhere if you don't dare to take concrete action.
Knowing more about money will help you find concrete ways to improve your finances. And this almost necessarily involves investment solutions.
You'll need to use your knowledge to actively work on setting up a financial system that pays off for you.
6. Seeking to earn more
As you will have understood from the last few paragraphs, saving and managing your money well is essential to becoming rich.
However, even if you are extremely meticulous with your spending, you are bound to reach a ceiling in your savings that will be dictated by how much you earn.
If you earn a salary of 1700€ per month, without any other source of income, once all the superfluous expenses have been cut, you will still have essential expenses to cover such as rent, food, transportation...
To put money aside, the goal is to increase the gap between what you earn and what you spend. This can be done in two ways:
- Spend less (limited - you'll still need to spend money to live)
- Earning more (unlimited - yes, yes)
The more money you have, the more you can save and invest. That's why increasing your income will allow you to move faster, further towards your financial goals.
Investing, which we mentioned earlier, is a way to earn more (whether it's through real estate, stock dividends, etc.).
But to give yourself a little extra income each month, you should know that there are also several methods such as finding a home-based job to do in your spare time or earning money on the internet.
Also, think about :
- Selling items you no longer need
- Starting your own online business
- Asking your boss for a raise
In summary
Keep in mind that it is possible to get rich fairly quickly and legitimately. If you know where to look, and understand how to go about it.
Even if it is far from the images of superstars with exuberant spending, becoming rich is a reality that will necessarily require you to work hard to achieve it (... and especially to stay rich).
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