Tips that pay off: How to grow rich in the future by setting yourself up now
Humans crave instant gratification. This craving is one reason we are attracted to short-term financial goals like getting rich fast — as opposed to investing and budgeting. But just like long-term changes to promote healthy eating are more sustainable than crash-dieting, building healthy financial habits is more sustainable than crash-saving.
Low on money? Instead of restricting yourself to microwaveable ramen, try cutting back on several more imperceptible costs all at once — you’ll be pleasantly surprised at how quickly it adds up. And if you’re really trying to grow wealthier? Don’t fall for get-rich-quick schemes: If it sounds too good to be true, it probably is. Instead, make some smart investments now that will pay off later.
Without further ado, here are five definitive tips on setting yourself up now for financial success in the future.
Tip No. 1: Talk to your parents about their financial situation before it’s too late.
As you focus on your financial life, there’s a big elephant in the room you’re probably not seeing: your parents’ financial situation.
You might think you’ve got years to figure it out, but the problem with waiting is you never know how much — or how little — time you actually have before health or other problems rear their heads. You don’t want to wind up figuring out how to manage their finances after they’ve lost the ability to do so.
Don’t let yourself be one of those kids who didn’t have the conversation. Instead, follow these tips to have “the talk” while your parents are still healthy and can work with you to make a financial plan for the future.
Tip No. 2: Don’t wait to make smart investments for your future.
If you are already saving the recommended 12% to 22% of your income (cue panic mode) you might be looking for other ways to grow your wealth — through smart investments.
Even if you just have an extra $100 or $1,000 lying around, it’s a good idea to harness that cash right away to make it grow for you.
We consulted investment professionals to come up with nine investment ideas that will help you feel more financially secure — with explanations about how to start investing in each.
Tip No. 3: Bonus: Consider investing in a startup.
Pssst: It’s been possible to get rich from a startup since 2016. In May of that year, a law took effect that allows anyone to invest at least some of their cash in startup companies. Until then, buying a stake in a small private business was something only wealthier investors could do.
But just because you can doesn’t mean you should. For obvious reasons, investing in small businesses that don’t have a guaranteed future is risky.
We spoke to experts to find out how you should approach this type of investing, including the potential risks and rewards — plus how to get started, if it is the right fit.
Tip No. 4: Save slow.
When people are low on money, they tend to set unrealistic savings goals to remedy their panic. What if instead you shaved off just a little bit in expenses — without really changing your lifestyle — and started pocketing just $10 extra every single day?
That adds up to $3,650 a year, which you could put toward all sorts of financial goals.
Does banking a 10-spot every day of the week seem difficult? It won’t if you follow these simple tips. Here are some super easy moves you can make — right away.
Tip No. 5: Whatever you do to save, don’t do these 5 things.
Saving money and spending less are both great goals, but too much of a good thing can actually end up backfiring on you. If you’re compromising on the wrong purchases to pay off debt sooner or save money faster, you could end up seriously hurting your safety or health.
If being cheap damages your health or puts your safety at risk, that frugality is hurting you — instead of helping.
So, for the love of whatever you worship, avoid these five big “don’ts” when it comes to trying to spend more wisely.
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