Make Moves to Build Wealth Now

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Despite a lackluster economy, there are at least 10.4 million millionaires in the United States as of last count. No matter how those people got into the club, they’ve all learned the hard lesson that holding onto wealth is just as hard as creating it. If you want to build a nest egg for yourself and future generations, here are a few time-tested strategies that nearly every wealthy person utilizes.

Craft a Budget and Stick to It

The foundation of any great fortune is accounting. Devising a budget that covers every monthly and yearly expense is a must if you want to build a nest egg. Fortunately, there are a slew of free personal finance suites like Mint available online that simplify the budget-creation process. Consult a financial planner to help you fine-tune your budget for added security.

Maintain an Adequate Savings Buffer

One of the easiest ways to build wealth is to ensure that you don’t spend extra on interest by having to borrow quick cash. While car loans and mortgages are inevitable for most citizens, a prudent saver shouldn’t have to take out additional loans for day-to-day expenses. You should have enough money in the bank to pay for six months worth of bills at a minimum.

Build Credit and Use It Wisely

Nearly every great fortune has resulted from the smart use of credit. The key is knowing how to leverage credit to control productive assets. Simply borrowing money to buy a boat is idiotic. Using credit to purchase a rental property that will produce revenue for decades to come is smart. Attain a high credit score and maintain it no matter what happens.

Slash Your Tax Exposure with a Vengeance

Even if you use TurboTax or hire an accountant, it’s important to understand how taxes work. There are literally thousands of common tax deductions that individuals can use that are often overlooked.

Live as Cheaply as You Possibly Can

Many would-be millionaires waste thousands per year on expenses that can be easily avoided with a little homework. Cutting down on out-of-pocket living costs is pretty simple if you become a savvy shopper. First things first, never buy a brand-new car. Buy pre-owned models from reputable dealers instead. Ditch expensive cable packages in favor of unlimited Internet plans from high-speed carriers.

Learn the Difference between Penny-Wise and Pound-Foolish

If you grow up without a lot of money, it’s easy to confuse being cheap with being frugal. Many try to save a dollar here and there by buying sub-par goods that will end up costing them more in the long run. If you’re going to buy anything that you plan on having for awhile, get quality merchandise that’s built to last.

Invest in Your Own Financial Education

Knowledge is a big part of the success equation in any area of life. You can’t win the game if you don’t understand the rules, after all. Start by staying abreast of tax code changes. They evolve every year and can have a big impact on your financial well-being. Spend at least five minutes per day on a site like Investopedia boning up on basic financial literacy.

Plan for Child Education Well in Advance

For the average family, education is one of the biggest expenses that will be encountered in a lifetime. You can provide your kids with high-quality education without breaking the bank by taking advantage of every discount available. Aggressively pursuing scholarships is one way to keep the bills low. Dual-enrollment programs for high school students allow promising teens to earn college credit cheaply.

Start One or More Side Businesses

Like it or not, one of the few ways that the average person can get ahead is by striking out on their own and becoming a self-employed maverick. Any hobby or interest that you might have is ripe for exploitation. Pick a business opportunity that doesn’t require a lot of start-up capital and build the enterprise slowly from the ground up.

Build a Diversified Investment Portfolio

Over the long haul, financial instruments like securities deliver terrific returns on investment when they’re chosen wisely. Buy a basket of blue-chip stocks when the market is at a secular bottom and buy the dips when they occur. Purchase precious metals and put them in a safety deposit box. If you’re worried about inflation eating into your gains, buy Treasury Inflation-Protected Securities or TIPS for peace of mind.

Speculate in Various Forms of Real Estate

Ultimately, there’s a limited amount of land on the planet and an increasing number of people competing for it. As such, real estate will always be a wise investment given enough time. Unimproved land in up-and-coming locales will often produce the best returns. Rental properties like condominiums and apartment buildings are goldmines if you don’t mind dealing with the paperwork.

Start Planning for Your Retirement Early

Practically everyone in the United States underestimates how much money they’ll need to enjoy a comfortable retirement. A big part of the problem is a fundamental misunderstanding of how inflation gradually chips away at the value of a nest egg. Start off with a 401K at a very minimum. Figure out how much money you think you’ll need for retirement and increase that figure by 50%.

Optimize Legal Structures for Future Inheritances

If you simply leave your money and physical assets to your descendants using a will, the government will take a hefty portion for itself. Using blind trusts and transferring titles before you pass away is a smarter way to divvy up your estate. Consider the estate taxes levied by various jurisdictions when deciding where to retire and make the most attractive state your official domicile.

A Reliable Path to Long-Term Wealth and Prosperity

Building and retaining wealth is less of a sprint and more of a marathon for the most part. A fortune is rarely the result of a single action or turn of events. Every penny saved and opportunity seized ultimately makes a difference. If you keep your eyes on the prize and utilize the techniques mentioned here, you stand a better-than-average chance of building wealth that your entire family can enjoy.

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