People often look for the quickest and easiest path towards prosperity. However, lasting wealth isn’t built in the fast lane. Growing one’s wealth often is a slow and steady process that develops over time. Here are a few crucial steps and habits to increase your wealth.
First, how is one’s wealth measured? Wealth can be measured by an individual’s or household’s net worth, which consists of assets such as savings and investment accounts excluding debts like loans and mortgages. So, you might be wondering, how do you grow your wealth for you and your family’s future?
“Wealth can be measured by an individual’s or household’s net worth, which consists of assets such as savings and investment accounts excluding debts like loans and mortgages.”
Save, save, save
You’ve started your new job and have been working hard to earn your salary, but you’re not saving enough. What could be wrong? The main reason could be that your wants exceed your budget. So, what are the ways to save money? Here’s one – tracking your monthly spending and analysing your changing needs will help you understand where your money will go each month.
After carefully distinguishing your wants and needs, you should aim to save around three to six months’ worth of expenses in case of any financial setbacks or a rainy day. Once you’re meeting your saving goals, you should be able to reward yourself and splurge (a little) once in a while. This accomplishment will make you feel better and motivated to make more money.
Invest money wisely
You’ve set aside your monthly saving goal; it’s now time to invest. When you invest your money, it gives you the potential to earn more money in return. There are several types of investment opportunities available such as property, steel, cryptocurrency, stock trading and Investment-Linked Insurance Policies (ILPs).
Investment-Link Insurance Policies (ILPs) is where a portion of your insurance premium goes towards a life coverage, and a portion will be invested. You can choose from a wide variety of funds you are interested to invest in and monitor your policy according to your needs. At AIA, we offer a wide range of investment-linked plans to maximise your potential returns. Speak to our Life Planners to find out more about our ILPs.
Run side hustles
You can turn your talent or hobby into extra income during your free time. Having a side income means you don’t have to rely on your pay cheque to increase your wealth. Side hustlers can include part-time professors at a local college, content creators, web/app designers, consultants, part-time drivers and more. Improving your skillset can also grow your wealth. Focusing on your professional growth such as getting a degree, an MBA or a special designation will earn you a promotion and salary increase.
Slow and steady wins the race
It is important always to start as early as possible and to stick with it. Most people make the mistake of withdrawing money from brokerage accounts too soon and chasing other investments. Take the time to review a risk management plan. Having the patience and discipline to research, plan your next investment will give you a higher probability of success.
Watch this video for tips from Anna Haotanto and Lachlan Campbell, members of our AIA Voices community as they explain on how and when to start planning and investing.
"With a combination of the right attitude, most importantly – dedication and discipline, anyone can grow their wealth."
Building wealth is not a hard process to master. With a combination of the right attitude, most importantly – dedication and discipline, anyone can grow their wealth. This is why it is crucial to equip oneself with enough financial knowledge to take the necessary steps to seamlessly build your wealth. All the best and good luck in growing your wealth!