9 Keys to Building Wealth from Spare Change
What to Do With Spare Change: 9 Tips to Build Wealth
Everyone is looking for ways to build wealth. It doesn’t matter if you’re starting to build a fortune from coins and spare change because the truth is, there are no shortcuts in getting rich. You don’t just wake up one day and get rich; you need to work hard for it. According to the 2019 Fidelity Millionaire Outlook study, the average age of millionaires in the US is 66 years, meaning most millionaires require decades of years working, saving, and investing before reaching the 7-figure net worth.
Are you looking for ways to build your wealth? If so, here are some ideas you can try that include money management tips and micro-business ideas. Not only should you follow these tips but you also need to acquire the right investment attitude, which will help you persevere in turning your dream to reality.
1. Start Saving Now
People think that they should start saving once they have regular work with a steady income. However, if you start saving now, despite not yet having a steady income, it will become your habit. Once saving becomes a habit, it will not be hard for you to set aside an amount when you have a steady income. These savings, no matter how small they may be at first, will help you survive your “rainy days” and will keep you from liquidating your investments for emergencies.
2. Invest Your “Spare Change”
Investing is one of the sure ways to earn money. However, if you have limited money saved for investments, you can try to invest in “spare change” investment apps that allow you to start investing with just $5. This form of investment is popular with college graduates and younger people who are planning to build wealth at a young age due to its low minimum deposit requirement and simplicity of usage.
Before submerging yourself into this type of investment, learn its pros and cons to know if this is right for you. There are also low initial investment mutual funds offered by some mutual fund companies who are willing to waive the account minimums if you can commit to a minimum monthly investment of $50 to $100.
On the other hand, if you have long-term financial goals, you can set aside your spare change and put them in a jar until you reach the usual initial minimum required investment deposit of $500 to $5,000 for mutual funds. The important thing is not to let your savings sit inside your piggy bank or savings account. Make your money work for you by investing it. That way, you can build a fortune out of your spare change at a slow and steady pace.
3. Automate Your Finances
Automating your finances involves dividing your salary and automatically depositing certain amounts to your savings accounts for savings, emergency funds, bills, and/or investments. This way, you will not be tempted to spend your money for bill payments and investments you haven’t planned for. Every year, you can review your automated plan strategy and try to increase your transfers over time so you increase your savings and investment fund.
4. Cut Back on Your Spending
Before cutting down on spending, it would be wise to track your finances first. Remember that you are not obliged to spend all the money you earn on things you want just because your salary enables you to do so. Why not make it a goal to spend only 70 to 90 percent or less of your income? You can do this by cutting a portion of your spending on less important things, such as buying overpriced meals in convenient stores when you get hungry in the middle of the night. To save more and build a fortune out of your small income, why not buy snacks in bulk on grocery stores or look for cheaper and healthier ways to satisfy your cravings and hunger? The point is, avoid splurging on things you don’t need. If you do your best to live simply and below your means, you are building a fortune in a stress-free way.
5. Pay Your Debts on Time
Credit cards allow you to spend money you don’t have. While using credit cads can be very convenient, especially for emergencies and other important expenses, you can bury yourself in debt if you’re not careful. If you are in deep debt, you’ll never get rich.
The lesson: avoid using credit cards for emergencies anything you cannot already pay for in cash. Pay all your bills on time to avoid accumulating interest and drowning yourself in consumer debt. Do not be fooled by “buy now, pay later” promos. The longer you pay for something you owe, the farther you are from achieving financial freedom. Better yet, weigh the pros and cons of credit cards before getting one.
6. Get Rid of Unnecessary Stuff
Aside from cutting back on your expenses, you can save more and build wealth by getting rid of unnecessary things you already own. The fewer things you own, the less you need to spend to maintain them. Check the appliances you have at home. Are there things that are just sitting there you haven’t used for a year or more? If so, why not sell them and add the money to your savings and investments? You can also lower your electricity bill by doing so and make your home more spacious.
7. Invest in Yourself
Another way you can get rich is by investing in yourself. You can get financial education or seek the help of a professional financial company that will help you understand how to manage your finances wisely and achieve your long-term financial goals such as building wealth, even on a modest income.
Another way you can invest in yourself is by studying and learning new things and skills that you can use to get freelance work or start your own business. These skills will not only help you earn more money, but it will also boost your self-confidence and overall sense of self-worth.
8. Have Multiple Streams of Income
It has been predicted that the 2020 inflation rate in the United States will average at 1.9%. With consistent inflation, holding one regular job may not be enough for you to build a fortune. To keep up with the cost of living and save up for your future, you might consider multiple streams of income.
Aside from taking a part-time job, why not think of business ideas you can start at home? These can include doing jobs that will help you earn passive income such as producing digital products like writing your own ebook, selling advertising on your blog or website, or producing videos on YouTube? If you’re knowledgeable about graphic design and digital art, why not take commissions and earn by practicing your talent? Really, you just have to think of how you can earn from the skills and interests you already have.
9. Surround Yourself with People Who Have Similar Financial Goals
People who share your financial goals will understand the financial decisions you will make. They won’t laugh at you or scold you for cutting back on your expenses or adapting a simpler lifestyle. They will share with you tips on how you can stick to your goal of building wealth without depriving yourself too much. On the other hand, they can also learn from your experiences and sound advice in securing a solid financial future. Good friends form your financial goals support system.
If you are planning to build wealth, do not wait for the perfect time to make this a reality; the perfect time may never come. Rather, act now and apply these nine tips so that you can build a fortune with what you have right now.
Jason Garcia - is manager of a family enterprise, property consultant and a business specialist. With a niche blog for property leasing and real estate investment, he also writes articles advising readers on how to invest and secure homes and businesses.