Now you may not have the money of the highest paid player in the NFL to be considered rich. I’m sure there are different variations of the word “rich”, but I think it’s a pretty good judgement of the word if you are free of debt, have a good emergency fund built up, a 401(k) account to draw off of in retirement, not to mention having some side income coming in on a monthly basis. To me that would be in pretty good financial shape, seemingly above most common folk, and could be considered by their peers as being rich. It will definitely not happen overnight, but with proper planning and many, many years of building up, you too could be rich one day as you hit your retirement years and get ready to walk away from work for good and enjoy life.
Now this seems like common sense, but in order to free up any extra money each month it really has to do with reducing expenses, having more money come in than go out, so if your income is not going to change all that much, then you have to reduce the money going out. This could be a combination of cutting back in some areas like cutting the cable cord, or going out to eat, in favor of going grocery shopping and eating at home. This could save hundreds each month.
Making Saving a Priority
To be blunt, you will not have anything to live off of in retirement if you don’t save up for it, and unfortunately if you aren’t making saving a priority right now, then you are seriously jeopardizing your future earnings by not contributing money per paycheck to grow over the next few decades until you are able to retire. A good place to start is your 401(k) accounts at work, especially if they offer matching contributions, so if you aren’t taking advantage of that full match, then you are just leave free money on the table that will not be able to grow over time.
Take on a Side Business
If you have reduced the amount of expenses the best of your ability, then maybe it’s time to bring in another income. This could of course come from picking up shifts at a second job, but with the amount you can do out of your home these days, you can work in your free time selling items around the house, that you’ve made, or even have a party planning business, or what you are reading right now, writing personal finance articles to throw in my two cents.
Gain Rental Income
As you start to build up the funds needed to purchase a second property over time, this is a great way to have a steady rental income come in each month that can exceed that mortgage payment and put a few hundred in your pocket each month. As you pay off that property is when the real money comes in. Not only will you own the equity in the home outright, but you will get a rental income on top of that which you can keep all, short of any taxes or insurance, or property management fees on top of that. Grow to own a few properties and the money will start to significantly trickle in.
Try Your Hand at the Stock Market
Not I am not experienced in this area, but hearing from friends that are active, is where you can earn decent return on solid stock purchases, so it’s a good idea to consult a financial planner if you plan on investing in the stock market, which we know can fluctuate greatly, with levels of aggression. This may be a later resort to decide to play around with, as returns are not guaranteed and it can be stressful to see how prices can change daily and you may not have the patience to wait out the highs and lows.
Use Your Talents
Whether it is selling craft items that you made at home, restoring classic cars, or even larger, buying and flipping houses, there are really endless means to gain extra money by using your talents. I personally wish I was handy enough to flip houses, as that would be interesting work, but unfortunately, I missed the boat on being able to do home renovation. They say that money doesn’t buy happiness, but if you are able to save, have income coming in that greatly outweighs expenses, and are able to afford what makes you happy, then I say maybe money does buy happiness.