The principles of wealth building are simple truths that you can follow to achieve financial independence. As you begin your journey towards financial independence you may start to notice that many of the financial gurus say the same things. They just say it differently. Some of the most common principles of wealth building are doing things like paying yourself first. Reducing you expenses, and learning how to invest. In the book the Richest Man in Babylon. George S. Clason covers some of these basic principles. The wealth building principles are as follows: Pay yourself first: Paying yourself is a crucial key to financial freedom. If you are not paying yourself first you are going to have a hard time reaching financial freedom. Remember the old saying by Benjamin Franklin, “a penny saved is a penny earned.� If you earn 50 thousand dollars a year but you are only saving 1,200, how much are you really earning? I will give you a hint, the answer is not 50 thousand dollars. Make of thy dwelling a profitable investment: What this means is set up a plan to pay off your house as soon as possible. One of the best ways to increase your wealth is to pay off that big mortgage. Imagine all the things you could do if you did not have a mortgage payment. Control thy expenditures: Controlling your expenses is a very simple yet crucial step towards building wealth. I have yet to meet a wealthy man who lives beyond his means, so track your expenses and look for ways to use your money more efficiently. You can do this by not eating out as much, reducing the cable bill and using coupons just to name a few. Guard thy treasures from loss: Before you invest in anything make sure you are very familiar with the investment at hand. Never put you hard earned money into something that you are unfamiliar with. This is a sure way to lose money. Increase thy ability to earn: One of the best ways to increase your wealth is to excel at what you do. If you are an employee, be the best employee that you can be. Look for ways to make your company more money or ways to reduce company expenses. Find the people out there that are excelling at what they do and learn from them. Insure a Future Income: Make sure that if something should happen to you that your family will be taken care of. This means having the right types and amounts of insurance. Also a great way to insure a future income is through real estate investing.
Make thy gold multiply: A sure way to wealth is learning how to make your money grow. We do this by using the miracle of Compound interest. Learning about these basic wealth building principles is a crucial in our quest for financial independence!
Resources:
The Richest Man in Babylon By: George S. Clason
5 Lessons a Millionaire Taught Me By: Richard Evans
Automatic Millionaire By: David Bach
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