4 steps to become wealthy: Number 4 is the hardest

Do you want to become wealthy and say good buy to your 8-5 job? If so, you have come to the right place. It is not easy to build massive wealth. Many people will list a ton of things you need to do to build wealth. However, becoming wealthy boils down to 4 simple strategies and I am here to share them with you.

No matter how much you try, if you can’t succeed in each of the following steps, you will find it difficult to reach your financial need and become wealthy. The steps are simple and easy to follow. However, they are overlooked.

The good news is that I am here to tell you exactly what you should be doing and how to do them. These 4 steps will be the foundation of your success. So, if you really want to become wealthy, pay attention to these simple steps and make sure that you excel in each one of them.

Without further ado, the following are the 4 steps to become wealthy.

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Step 1: Start saving

In order to become wealthy, there is a set of skills you will need to master. These skills will depend on your own experience and level of knowledge.

Saving money is the first step you must take if you want to become wealthy. You must become a different person. So, if you are not good at managing/saving money, you must start today. This is the only way you will be able to achieve financial success and live happily.

Why should you save money?

Well, saving money is part of managing money. Those who are financially successful are good at managing money. When you can save money, it means that you are in control of the money, not the other way around.

The money you save will help you pay off your debt faster. If you don’t have debt, congratulations. The debt you have must be taken care of before you move to other steps necessary for your wealthy building journey.

More importantly, saving money will help you raise the necessary capital for other crucial steps to achieve financial independence and become wealthy.

To learn more about saving, refer to the following articles.

Step 2: Reduce your expenses

Your expenses will determine whether you become wealthy or not. If you spend more money than you make, you will never become wealthy.

In order to fulfill your financial obligations and have extra money from your income, you must reduce your expenses. Spending less money will free some capital that will be used to increase your savings. You can see that in order to succeed at saving money, you must also be good at reducing your expenses. Otherwise, you will spend everything you make which, in turn, will bring your savings to zero. Hence, hindering your ability to become wealthy.

Why are saving and reducing your expenses the most important steps to take when you want to become wealthy? Well, becoming wealthy does not start with making millions of dollars. Instead, everything starts with simple laws of money. Having discipline around money. Learning how to manage money. Understanding how money works.

The more you understand about money before you get too much of it, the easier it will be for you to manage a lot of it. Have you heard of lottery winners who become bankrupt a few years later? Yes, most lottery winners lose all of their money and end up selling their houses. Why?

To understand this, we need to know how our brains work. There is something called comfort zone. The money you have today is your comfort zone financially. If someone gives you $20,000 more per year, you would start thinking about how to spend it. For example, you can start thinking about improving your house, buying a new car, donating to your favorite charity, etc.

This is your body telling you that you need to get rid of the money because your comfort zone was violated. That is your body was not fully trained on how to handle the added income, and therefore, it is looking for justifiable ways to get rid of it. Everything happens in your subconscious. You never know about it. Most people who win lotteries get out of their comfort zones. When this happens, their brains try every way possible to get rid of the money by increasing their expenses. Most of them buy mansions, expensive cars, etc. The problem is that all these luxury things come with revolving expenses without income to support them. Hence, draining all the money they won. A few years later, they(lottery winners) file chapter 7,13, or 11 bankruptcy.

In order to reach financial independence and become wealthy, you need to learn how to manage money before you make too much of it. That is learning how to save most of what you make and reduce your expenses. Even if your income increases overtime, your expenses should staty the same or decrease. Once you reach this level, it will be an indication that the next step will probably work.

Reducing your expenses will also help you reach the capital you need in the next step. The first and second steps will not bring you wealth. However, they are the cornerstone steps you need to achieve everlasting wealth.

The following articles can help you reduce your expenses and improve your financial standing.

Step 3: Invest as much as you can

Investing is the only step that will help you become wealthy. Other steps support this one. What is investing in the first place? Well, I define investing as follows.

Investing means: Make your money grow or make your money work for you. This is the simplest definition of investing. For example, you can buy 1,000 shares of a stock at $1 each. This will cost you $1,000. If the same stock reaches $200 10 years later and you sell all your shares, you will receive $200,000. That is your $1,000 grew to become $200,000 in just 10 years.

Do you know how long it will take you to make that money from working? Well, it will all depend on how much you make at your job. Some people can work even 40 years without making $200,000. Others can make the same amount in one year. Do you know how much you would have worked to pick that stock? Less than 40 years!

The point here is that there is no other way you can turn $1,000 into $200,000 without investing. This is why I define investing as making your money grow.

Investing is the true source of wealth and those who master it become wealthy. If you want to become rich, start learning about investing today. Learn as much as you can and start investing.

Even if I said that investing is the true source of building wealth, you cannot achieve it if you suck at the first two steps. If you can’t save money or reduce your expenses, everything you make will disappear. As a result, you will not know how to manage your money or have enough money to invest. That is why the first two steps are crucial to the success of the third step.

After investing your money, you will move to the next step. Which is much easier since you do nothing.

The following articles can help you navigate the investing maze.

Step 4: Be patient

This step involves pretty much nothing. You just sit down and wait patiently. That is right. This is not a typo.

Building wealth is a process, not a marathon. So, if you are going to achieve long-lasting wealth, you need to know that waiting is part of the game. Millions of people out there fail at investing not because they chose the worst investment options. Rather, because they fail to peacefully sit down and wait.

Let’s try to understand this point further. What would you do if you buy a stock today and one year later you realize that you have lost 50% of your total investment? Would you get out? Should you buy more shares and average down? Or should you wait? Most people think about what could happen if the stock continues to go down. That is if the stock goes down further, they will risk losing all the money they invested.

So, to stop the bleeding, they sell and get out. That is investing is more about your emotions rather than the investment you pick. This is why waiting patiently is the hardest step of building wealth. A lot happen during your investment timeline. Markets crash, economy slows down, etc. All these events cause volatility in the market and your portfolio follows the same trend. If you cannot stomach the volatility, you cannot succeed at waiting patiently.

There you have it. The only 4 steps you will ever need to achieve financial freedom and become wealthy.