Greetings,
This is the first article in my '
Accumulating Wealth' Series. In this article I will reveal
The Only Two Ways to Increase Your Wealth.
When you think about the idea of increasing your wealth, and the struggle that so many of us go through day in and day out trying to 'make it', trying to save, trying to invest, and eventually trying to retire, all of these pursuits are essentially our attempt at one thing: increasing our wealth. Increasing our wealth to a point where we can live comfortably for the rest of our lives.
Now, to do that - to successfully 'increase your wealth' - it really boils down to a simple, straightforward formula. In fact, at the lowest common denominator, after everything is removed and you are left with what we in the military call the "Bottom Line Up Front," there are only two ways to do it:
Increase your income, or decrease your expenses.
That's it. It essentially is that simple. Increase your income, or decrease your expenses.
I hope you are not disappointed because you were expecting some profound revelation that no one has heard of or written about before. However, despite its simplicity, so many of us never are actually able to accomplish this. That's why I feel it is relevant to talk about, and will be spending the rest of this series highlighting how one can achieve this.
Now, decreasing your expenses, I believe, is easier to attack than increasing your income so for this first post I will begin by discussing this particular aspect of the principle.
The first step in decreasing your expenses is to
understand where exactly your income is going each month. Without a clear picture of the flow of your $s, you will have a difficult time formulating your plan to decrease them. Understanding where your income is going
starts by having a budget. A budget, essentially is nothing more than your way of tracking the various places you are spending your money, and then setting limits for each category. Some common categories for your budget are: your mortgage or your rent, car payment, groceries, gas, cellphone bill, utilities, entertainment, etc. "
How to Budget your Money" is a great starting article to get you thinking, and "
Planning a Family or Personal Budget" has an example excel Budget Spreadsheet to help you actually begin your personal budgeting process. The internet is full of information on budgeting. Take advantage of it!
Decrease your expenses. Three words that may sound easy, but to truly be successful takes a disciplined approach, a thought out plan, and continued monitoring. In the end, however, your efforts
will be worth your time, and you'll soon be reaping the benefits of increased wealth!
That's all for now. More to follow on the other side of this principle (
increasing your income) in the next post,
DividendPartisan
