Take lessons from millionaires to build wealth quickly.
Money Girl
235 MG Five Lessons to Grow Rich
Imagine earning a degree that prepares you with real skills for the real world. Capella University's programs teach skills relevant to your career so you can apply what you learn right away. Learn how Capella can make a difference in your life at Capella.edu. Thanks for downloading the Money Girl Podcast. I'm your host, Laura Adams. One of the most surprising facts about wealthy people is that most of them weren't born rich. About 80% of the most financially successful people in the United States are first-generation millionaires. That means they accumulated wealth by working hard and saving money, and having a great business idea doesn't hurt either. So if you think growing rich is not possible for ordinary people, I'll give you $5 million lessons you can use to start building your personal fortune today. The process of becoming wealthy begins in your head long before you ever start to see it accumulate in your bank account. Believe it or not, when it comes to growing rich, the financial philosophies and disciplines you adopt are much more important than how much money you make. Wealth lesson number one, live below your means. Wealthy people know that saving and investing, not spending, is how you grow rich. It's ironic, but many millionaires live inconspicuously and don't drive brand new luxury cars or live in huge estates. You'll never meet a wealthy person who lives paycheck to paycheck. That's because they understand that living below your means and having plenty of discretionary income to invest is the golden ticket to building wealth. This million-dollar lesson is true no matter if you make $50,000 or $500,000 a year. Yes, it's certainly more challenging to have money left over at the end of the month when you make less, but it's not impossible. So the first step to becoming wealthy is to realize that living within your means is a choice. If you can free up $200 every month starting in your mid-20s, you could retire at age 65 with over half a million dollars. But if you never get started investing for the future, you'll be forced to scrape by during retirement on a meager social security income. Wealth lesson number two, think long-term. Maybe you're asking yourself, who thinks about retirement when they're 25? Well, thinking long-term is the second million-dollar lesson because building wealth doesn't happen overnight, unless you win the lottery or inherit it, of course. Successful people create long-term goals and then work backward so they know exactly what they have to accomplish each year, month, week, or day to stay on track. Shifting your mindset from spending to saving doesn't come naturally for everyone. But if you want to build wealth, you have to exercise the mental muscles that allow you to push away short-term gratification in favor of long-term goals. For instance, when you see a great pair of shoes in a store window, you've got to keep on walking unless you're absolutely desperate for shoes and the price is right. That's just a small example, but the idea is that having meaningful, long-term financial goals makes it easier to say no to small or large purchases that don't move you closer to achieving those goals. Wealth lesson number three, save and invest wisely. After you begin living below your means and are focused on the long-term, it's time to make your discretionary money work hard for you. The third lesson to take from the wealthy is that they save and invest an average of 20% of their annual gross income. There are many ways to make quality investments that are right for your goals, interests, and expertise. Wealthy people typically seek advice about their finances, so you should never hesitate to consult with an investment professional when you need it. Check out my previous podcast, number 206, called "Do You Need a Financial Advisor?" Once you set the process of saving and investing in motion, it's easy to continue because it becomes a habit. Imagine earning a degree that prepares you with real skills for the real world. Capella University's programs teach skills relevant to your career, so you can apply what you learn right away. Learn how Capella can make a difference in your life at Capella.edu. AI might be the most important new computer technology ever. It's storming every industry, and literally billions of dollars are being invested, so buckle up. The problem is that AI needs lots of speed and processing power, so how do you compete without cost spiraling out of control? It's time to upgrade to the next generation of the cloud, Oracle Cloud Infrastructure, or OCI. OCI is a single platform for your infrastructure, database, application development, and AI needs. OCI has four to eight times the bandwidth of other clouds, offers one consistent price instead of variable regional pricing, and of course, nobody does data better than Oracle. So now you can train your AI models at twice to speed and less than half the cost of other clouds. If you want to do more and spend less like Uber, 8x8, and Databricks Mosaic, take a free test drive of OCI at oracle.com/advanced. That's oracle.com/advanced oracle.com/advanced. Wealth lesson number four, understand taxes. One of the lessons that wealthy people live by is that you can keep more of your hard-earned money if you're smart about taxes. For instance, it's better to have income from long-term investments that are taxed at a maximum of 15% than to pay tax rates as high as 38% for ordinary income on wages. When you understand the rules, you can legally pay less by being strategic and taking advantage of more tax benefits. This is what I cover in chapter 10 of my book, Money Girl Smart Moves to Grow Rich. Wealth lesson number five, think like an entrepreneur. Many of the wealthy achieve financial success because they have an entrepreneurial mindset. So the fifth million-dollar lesson is to think more like an entrepreneur, even if you work for someone else. Being an entrepreneur comes down to recognizing how value is created in the world and capitalizing on it. Make a commitment to use your talents to generate more value at work in your own business or to earn a second income with a part-time side hustle. Becoming more valuable to an employer or to your own customers can be the key to earning more money, having a surplus of discretionary income and building wealth as quickly as possible. For much more about investing, building wealth, and smart tax moves, grab your copy of my award-winning book, Money Girl Smart Moves to Grow Rich. It tells you what you need to know about money without bogging you down with what you don't. It's available at your favorite bookstore in print or as an e-book. You can even download two chapters for free when you visit smartmovestogrowrich.com. You'll find Money Girl on Facebook, Twitter, Google+, and LinkedIn. All my contact information is on the Money Girl section at quickanddirtytips.com. If you have a money question or a suggestion for a future show topic, I'd love to hear from you. Email me at money@quickanddirtytips.com or leave a voicemail message at 206-333-1610. I'm glad you're listening to Qing. That's all for now. Courtesy of Money Girl, your guide to a richer life. [Music] Earning your degree online doesn't mean you have to go about it alone. At Capelli University, we're here to support you when you're ready. From enrollment counselors who get to know you and your goals, to academic coaches who can help you form a plan to stay on track. We care about your success and are dedicated to helping you pursue your goals. Going back to school is a big step, but having support at every step of your academic journey can make a big difference. Imagine your future differently at Capella.edu. See you! [BLANK_AUDIO]