Here are fourteen simple habits you can adopt today that will help make 2019 a more lucrative year.
- Negotiate. Do everything to earn a middle-income or better.
- Watch your spending habits. Now you have a surplus due to points 1 and 2. Ignore all marketeers trying to persuade you to spend money on people who you don’t care about, or trying to impress them .
You can’t build wealth if more money is leaving your wallet than coming in. To ensure you’re earning more than you’re spending, track your daily expenses.There are a handful of apps that will do this for you, such as Mint or Personal Capital. You can also use a spreadsheet on your computer or simply
record your everyday purchases in a notebook or on your phone.
- Now you have money left over every month. Next read the academic literature on investing. If you don’t want to, employ somebody who has.Investing is one of the most effective ways to build wealth and, contrary to popular belief, you don’t need a lot of money to get started. In fact, thanks to micro-investing apps such as Acorns, you can start with your “spare change.” That app will round up your purchases to the nearest dollar and automatically put any spare change to work.
- Now take your age. If you are below 40, keep 90%-100% of your portfolio in the markets. If above 40, keep at least 25% in government bonds.Start investing sooner rather than later to take full advantage of compound interest.
- Rebalance every 6–12 months from the winners to the losers
- Watch out for fees
- Especially watch out for egoism, fear and greed. They are the killers of wealth and why most people don’t get good returns. Most DIY investors get returns of only 2%-5% a year for this reason
- Always invest lump sums when you get them, don’t try to compound.
- Leave out any bias’ you have; investing shouldn’t be emotional
- Automate the process as much as possible – for example set up direct debits every month 1 day after you are paid
- Don’t keep looking at your valuations regularly – it just encourages speculation
- Once everything is working out, don’t become complacent. Start the process over again. Look for more ways to just earn 10% more, or spend 5%-10% less. An extra 10% can make a huge difference. A case in point. You are earning 50k and spend 45k. Now you are earning 55.5k and spending 39.5……your surplus has gone up by 300% and it will give you $2m or so extra in retirement
- Also don’t forget wealth protection like insurance.
- Learn from others who have achieved it.
Simply doing these things will result in a huge portfolio but most people find it difficult to do in the real world, as it goes against human nature.