AFRICANGLOBE – Would you like to be rich? Judging by how much is spent on lottery tickets, it’s fair to assume that many of us would love to be rich. Lottery sales in the U.S. totaled more than $73 billion during fiscal year 2015, according to the North American Association of State and Provincial Lotteries.
It’s fun to fantasize about what you would do with a windfall. But you can make your dream of being rich a reality without winning the jackpot. And you can start in 2017.
Make these New Year’s resolutions to take the necessary steps to improve your finances and grow your wealth.
I Will Be Frugal With My Money
The first step to having more money is keeping more of what you earn. “Being frugal will enable you to increase the amount of money you can save,” said Tom Corley, author of “Rich Habits: The Daily Success Habits of Wealthy Individuals.” “The more you have in savings, the more options you have to make money.”
To stop wasting money, be aware of how you’re spending it, Corley said. Examine your bank and credit card statements to see how much money is going toward things you want rather than things you need. Cut back on unnecessary purchases and shop around for the lowest price so you spend the least possible amount of money on things you need, Corley said.
Recognize, though, that simply being frugal will not lead to riches by itself. “It is just one piece to the financial success puzzle,” Corley said. So you’ll need to make — and stick to — some of these other resolutions.
I Will Cut My Biggest Expense
Take frugality a step further by slashing your biggest expense to free up more money for saving and investing. “When most people make financial resolutions, they think small,” said J.D. Roth, founder and editor of the Money Boss website. “If you truly want to make a difference, you have to think big.”
Housing is the biggest expenditure for U.S. consumers. On average, one-third of total household spending goes toward this cost, according to the Bureau of Labor Statistics. “There is nothing better you can do to improve your finances than cut your housing costs,” Roth said.
You can score big savings if you’re willing to move, Roth said. Perhaps you can move into a smaller house or to a different neighborhood. You might even consider moving to another city where the cost of living is lower.
For example, say you live in California, where the average monthly mortgage payment is about $2,300. Then, you move to Arizona, where the average monthly mortgage is roughly $1,000 less. If you invest that $1,000 savings each month over the life of a 30-year mortgage and earn 7 percent annually, you will have $1.13 million.
I Will Find a Mentor
A mentor can help you get on the path toward riches by offering advice, opportunities to advance your career, or guidance for launching or improving your own business. “Mentors can teach you success habits, change your beliefs,” Corley said. He added that mentors can teach you how to think, how to achieve goals, and specific processes that lead to success — as well as shortcuts to success.
Mentors are everywhere. You just have to seek them out, Corley said. A mentor can be:
“Make a list of successful people you’d like to learn from and just ask them out for breakfast, lunch or to have a beer,” Corley said.
Don’t be afraid to ask for assistance or advice, because most successful people enjoy helping others. “They derive pleasure and happiness from it,” Corley said. “You will find successful people very receptive to sharing their knowledge with you.”
I Will Save 1 Percent More
To grow your wealth, you need to commit to saving more. You can do this even if you don’t have a lot of money to spare at this point in your life. “This year, individuals should consider making one small but critically impactful change: Save just 1 more percent of their annual income for retirement,” said Jennifer Putney, vice president of participant engagement at Prudential Retirement.
Contributing an extra 1 percent of income won’t feel like a sacrifice, and it can have a big payoff over time, she said. For example, the average American household earns $56,516 a year. If you invest 1 percent of that amount — $565.16 — for 30 years at a 6 percent average annual return, you will have more than $47,000 extra for retirement. Factor in raises, and the number grows even larger. “One percent today can make a big difference in the future,” Putney said.
Talk with your employer’s human resources department about increasing your 401k contribution. Have the amount automatically deducted from your paycheck each month. If you don’t have access to a workplace retirement account, set up automatic monthly transfers from your checking account to an individual retirement account, such as an IRA.
I Will Save Half Of My Income
If your goal is to increase your wealth to retire early or simply get rich quicker, you’ll need to set aside as much as possible. “Ultimately, the best resolution you can make is to boost your saving rate,” Roth said.
Start by figuring out what percentage of your income you’re saving now. “Are you saving 5 percent each month? Twenty percent? Now, pick an audacious target,” he said. “I like to urge people to save half.”
More people are able to do this than they realize. For example, if you’re married and both you and your spouse work, consider living on one income and saving the other. “Pick a crazy target and aim for it every month,” Roth said. “At first, you’ll miss, and that’s OK. Start tweaking your spending until you get closer and closer to the bull’s-eye.”
I Will Create an Additional Stream of Income
Most people have one stream of income — their job, Corley said. “And if you’re like most people, you are either poor or stuck in the middle class,” he said. “If you want to break out of poverty or the middle class, you need to begin creating multiple streams of income.”
Start with a side hustle or second job. It is easy to find part-time gigs that can make you more money. Use your extra cash to quickly get out of debt or invest in assets such as stocks. Or, set aside savings so you can start your own business or buy rental property for additional streams of income.
I Will Pursue a Passion That Will Make Me More Money
Passion is by far the most important attribute of self-made millionaires, Corley said. “It is the catalyst that transforms ordinary individuals into self-made millionaires,” he said. “When you pursue something you are truly passionate about, you are somehow able to find the time to devote to it.”
So resolve to figure out what you’re passionate about this year and spend time cultivating that passion. It might mean reading books on the subject, taking courses to improve skills related to your passion or creating a business plan and pursuing funding. “You must take action and invest in yourself today in order to create the future life you desire,” Corley said.
It’s never too late to pursue your big goal or life dream, Corley said. “Too late is when you’re dead. Until then, you’ve got the rest of your life to pursue your dreams,” he said. “Don’t waste any more time. Let 2017 become your dream year.”
By: Cameron Huddleston