Becoming wealthy is a goal many of us hope to achieve in our lifetime. Some want to be wealthy to have unbelievable lifelong experiences or to validate success. However, the goal is often dreamed of but rarely achieved. Ken Fisher, the author of The Ten Roads to Riches, discusses the many ways people can achieve wealth throughout their lifetime, ten to be exact. All of these roads have proven to make someone independently wealthy in their lifetime. Some are more common than others. So, if the question of how to become independently wealthy has crossed your mind, I will discuss two of the ten roads Ken illustrates in his book.
What Does It Mean to Be Independently Wealthy?
To determine whether you are independently wealthy, you must ask yourself a few basic questions. First, do you rely on financial support from anyone? If not, then consider yourself financially independent. Second, do you depend on your employment income? If you answer no to the second question, you would be considered independently wealthy. When you have become independently wealthy, you have either saved enough or earn sufficient passive income to give up your day job.
How to Become Independently Wealthy: Save and Invest Wisely
I usually sign off my posts with a simple phrase: Budget Smart, Invest Wise. Budgeting allows you to allocate your funds to various categories. Hopefully one of those categories is savings. Whether your savings vehicle is an IRA, Roth IRA or other type of investment, saving money is critical to building wealth. However, saving is only half of the battle to building wealth this way.
The other key ingredient is investing wisely. Investing wisely means creating a smart investment plan. This may be with a financial advisor or through acquired knowledge that creates a return on your investment. For example, I have found that investing on a monthly basis in a mutual fund is of most benefit to me because it covers the broad range of the U.S. Stock Market. This investment, although it has risk involved, prevents me from being susceptible to the failure of one company or one sector of the market. Saving and investing wisely is the road most traveled. But, it also provides the greatest chance of reward.
How to Become Independently Wealthy: Invent Income
Inventing income can cover a wide spectrum of earning additional money. For example, if you are a songwriter or musician, you can create an ongoing stream of royalties from your lyrics or music. If you purchase a rental property, you could turn it into a cash flow positive stream of income. The possibilities are endless. Maybe you have a specific skill that people are willing to pay you to teach them. Perhaps your area of expertise at work can lead to consulting other companies on the side. Do you have something you’re passionate about that you can create into a blog or website and charge for ad revenue? Many of us have the tools, knowledge, and talent to create additional income. However, do you have the drive to reach your goal?
Becoming independently wealthy or successful all boils down to the level of commitment. If you are committed to becoming independently wealthy, then you can find a way. Some individuals, like Bill Gates or Mark Zuckerberg, created an enormous amount of wealth. Maybe you want billions like these company creators. On the other hand, maybe you will be satisfied with millions or even a million. Only you can determine what being wealthy is to you.
- Personal Finance: Reasons To Start Investing
- How to Start Investing When You Aren’t Rich
- How America’s Wealthiest Families Lost Their Money