Are you curious about how to get rich from nothing? This article offers you some great strategies for you to accomplish this goal.
Although some of us were born with a silver spoon, many people (including myself) were not born rich. However, just because our families aren’t wealthy doesn’t mean that we cannot become rich. Here are my top recommendations if you want to get rich from nothing.
1. Have a financial plan
A financial plan is a roadmap that helps you achieve your financial goals and provides specific actions on how to get there. It sets the tone for a correct money mindset. You can create a financial plan on your own, or work with a financial planner or a financial adviser.
These goals vary from individual to individual. You may want to own a house, have a family and raise kids, retire early, or travel around the world when you retire. What do you want your life to look like in 5, 10, or 20 years?
Actions on how to reach your goals
After you clearly define your financial objectives, you will want to work backwards to figure out what specific actions you will need to take to get there.
Suppose you want to own a home, and your dream house costs approximately $500,000. From there, you will need to figure out how big of a down payment you will need and what monthly income you will need to pay the ongoing mortgage. You will then know how much money you need to earn and how much you will need to save every month to reach out ideal down payment number.
Yes, one of the actions that come out of the exercise is that you may need to spend less money to save money. However, you will know that the small sacrifices you make today are the building blocks for a better future.
2. Have a budget
A budget is a not-so-secret tool that will answer your question on how to get rich from nothing. With a budget, you can easily monitor your income and expenses, and make sure that your savings are on track to help you reach your financial goals.
3. Do not take on unnecessary debt
First of all, let me make a disclaimer: not all debts are bad. Reasonable debts that you incur that can help you become wealthy and achieve your dreams are not bad. For example, I will not recommend that you refuse to take on mortgages for your first house, or some business loans to fund the start-up cost of your businesses. These debts can be the stepping stone for riches, as long as you use the debts wisely.
However, not all debts are created equal. Credit card debt is one of those that you should refrain from taking on. Credit card companies routinely charge 20% interest on balances that you cannot pay by the deadline, and the stuff you buy with these plastics are usually consumer goods that do not contribute to improving your net worth.
Spend what you have and do not take on debts for frivolous expenses.
4. Start investing early
Start investing early will allow you to reap the magic of compound interest as soon as possible. You will be able to accumulate wealth through capital appreciation and dividend.
If you are a beginner in investing, I recommend that you use Acorns (if you are in the US) or Moka (if you are in Canada to invest in index funds. These super easy-to-use apps let you invest your spare change. You can invest in a low-cost, diversified portfolio of exchange-traded funds, and you can watch your money grow effortlessly. Even better, your money will be making money for you thanks to compound interest!
If you have been investing for a while and want to step up the game, you can try your hands with SoFi Active, which is designed for higher amounts of active investing. It provides many useful tools and features to help you invest what you have. With no commission fees, management fees or account minimums, SoFi Active is a great platform for those of us who want to be in the driver’s seat of our investment portfolio.
Other than investing in stocks, you can also consider real estate investing, investing in cryptocurrencies, etc. Check out this article to learn more about alternative investments you may not have thought of.
5. Diversify your investment and income sources
It is risky to have all eggs in one basket. As such, diversifying your investment and having multiple streams of income is key to accumulating wealth. It gives you more options and freedom.
There are many ways for you to add a few income streams to make extra cash.
I am confident that you will bring in some extra money.
6. Utilize your talent
Do you have any unique talent that you can utilize to build wealth? Nowadays, there really isn’t a defined path to success. Especially with the advent of the internet, more and more people become well-known through self-promotion via social media and various platforms. Think about internet personalities like Markiplier and Pokimane. Neither of them achieved their successes through the conventional path of getting a college degree and getting a good job, yet they have been able to amass wealth at a young age through successful online business.
How they were able to be successful was that they were able to identify and maximize the use of their talent.
What is your talent and what is one great way you can utilize your talent to become rich?
7. Think unconventionally
Unconventional thinking is also key to getting rich. The world is always hungry for something new. The ability to think unconventionally opens doors to new ideas and new strategies. No matter whether you are an employee in a big global company or an entrepreneur working from your garage, unconventional thinking will lead you to a brighter and better tomorrow.
8. Start your own business
Many of the world’s self-made millionaires own small businesses. Most of the world’s self-made billionaires and individuals with high net worth also started their journeys as small business owners. It sounds pretty easy, but starting a business could be incredibly difficult. However, if you are determined to be rich, then owning a business may be a very viable option.
Of course, before you start a business, you need to make sure that you have a viable idea, and you are willing to work hard, much harder than the people around you. You will also need to be okay with the very high chance of failing. Building a business is not easy. According to the U.S. Bureau of Labor Statistics (BLS), only 25% of new businesses make it to 15 years or more.
Starting a business is a class example of high-risk-high-rewards. If you are up for the challenge, then you should give it a try.
Of course, you don’t necessarily need to drop everything right away. Perhaps you can start as a side hustle and see how it goes.
9. Read personal finance books
I am a book lover. Books teach me wisdom and help me on my journey towards building wealth. Over the years, I have enjoyed reading money book classics like The Millionaire Next Door by Thomas J. Stanley and William D. Danko, Rich Dad Poor Dad by Robert Kiyosaki, The Richest Man in Babylon by George S. Clason, Secrets of the Millionaire Mind by T. Harv Eker, and many more.
10. Believe in yourself
Confidence is key to success. Yes, you will experience setbacks on your road to wealth, but you shouldn’t give up. Believe in yourself and keep going.
Final Words on how to get rich from nothing
The above are my recommendations on how to get rich from nothing. At the end of the day, there is no get rich quick schemes in the personal finance world. If you want to escape the rat race and become a millionaire one day, then you need to work diligently, work smart, be frugal, and be financially responsible. You can be your own lottery ticket.
Bella Wanana is a freelance writer. She is the owner of bellawanana.com, a personal finance and lifestyle blog. She loves sharing with her readers the best tips and tricks on personal finance and how to live a balanced but fulfilling life. She has been featured on sites like MSN.com, Reader’s Digest, The Financial Diet, Yahoo Finance, and GOBankingRates.