Tips for Making Money and Building Your Net Worth

Tips for Making Money and Building Your Net Worth explained by professional Forex trading experts the “ForexSQ” FX trading team. 

Tips for Making Money and Building Your Net Worth

Making money isn’t nearly as difficult as many people would have you believe.  The ways to amass your wealth are infinite.  To put that into perspective, when I originally penned this article, according to the Federal Reserve Flow of Funds report, the value of all of the assets in the United States at the end of third quarter 2011 stood at $71,119,600,000,000.  You read that number correctly: More than $71 trillion dollars.

 In terms of opportunity and concentration of wealth, even Warren Buffett, arguably the greatest investor of all time, is worth a fraction of a fraction of one percent.  During this same period, household net worth (assets minus liabilities) stood at a still-staggering $57.4 trillion.

To live the life you want, you only have to redirect an insignificant, nearly infinitesimal portion of that $71 trillion into your own family’s balance sheet by offering society goods and services it desires or requires.  I’ve said it many times on my personal blog, but it is worth repeating: Ray Kroc sold cheeseburgers, Mary Kay sold makeup, Rose Blumkin sold furniture, Bill Gates sold software, Sam Walton sold everything from spatulas to moon pies.  You just need to figure out what it is you can provide at a profit to get started.  If you are a doctor, you sell your time for a paycheck by healing people.  If you are a school teacher, you sell your time educating students for a paycheck.

The hardest stretch of road on the path to fiscal success is getting started.  Those who have attained financial independence know that if you are self-made, the first $100,000 is the hardest to save.  In fact, getting started from nothing and making that first hundred grand can be more difficult than turning $10 million into $50 million.

 That is because early on in your journey, your net worth isn’t large enough to throw off enough surplus cash to matter.  It doesn’t require any more work or genius to own $10,000,000 worth of shares of Coca-Cola than it does to own $10,000 worth of the same shares, but the former guy is going to collect nearly $3,000,000 a year in cash dividends and the latter $300.  Money, like planets, creates its own center of gravity.  The more you have, the easier it is to make.

The Basics of Saving Money

How to you begin making money and growing your net worth?  Here are a few tips and pointers.

• There are only two things you can do to increase your wealth: 1.) Generate more cash, or 2.) Reduce the cash flowing out of your life.  I call this my two levers theory of saving money.
• Take advantage of every penny of free money you can get your hands on, such as free employee matches on your 401(k) contributions.
• Take advantage of tax deductions, such as 401(k) and Traditional IRA contribution write-offs, to lower the amount of money you have to send to the government each year, keeping more working for you.
• Focus on creating annuity streams rather than one-off profit shots.  That is, if you own a construction company, don’t just build houses and sell them.  Instead, consider building houses, owning them outright, and collecting rents for decades.

• Pay attention to the lifecycle costs of your purchases not the sticker price.  A good piece of furniture that costs three times as much as the alternative but lasts ten times longer is a better bargain that the seemingly cheaper selection.
• Make sure that you buy things that hold their value or, even better, appreciate in value.  It is stupid to make your biggest financial asset, other than your home, a vehicle.  That is a mistake made by a majority of American households.  Cars, trucks, and vans are great in terms of convenience but they not only cost a significant amount of money, they lose value, require maintenance, insurance, gasoline, and parts, all of which must be paid for in after-tax dollars.

Investing Guides to Help You Get Started on the Journey of Making Money and Saving Money

Once you have saved a little money, there are a few investing guides we’ve put together that might be useful to you.

Tips for Making Money and Building Your Net Worth Conclusion

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