Sunday, June 10, 2012

The 3 Steps of Becoming Wealthy

STEP 1: Earn as much money as you possibly can, and save more!
This might sound like common sense, but the key to get richer is you really have to spend less than what you earn. So, do your best to find a well-paying job and work hard to earn as much money possible. You have to also learn to live frugally in order to be able to save the most out of your earnings.

STEP 2: Invest your savings into either stocks or bonds to make it grow
While the amount of money you have is still fairly small, the only viable investment options would be to invest in either stocks or bonds. These investments don't require a lot of money to start. Doing your due diligence in finding the right companies to invest in will provide the most optimal return on your investments.

STEP 3: Use leverage to speed up the growth of your wealth  
Once you have accumulated enough money, you shall move on to the next level, which is using leverage to magnify the growth of your money. I do not mean using leverage to buy stocks, you're basically gambling if you decide to do so. The type of investment opportunities that I recommend include purchasing residential and/or commercial properties, buying franchise businesses, etc. Your timing, type of investments, cost of borrowing, and luck are all extremely crucialLastly, the use of leverage should be done with great caution and careful analysis as there are certainly significant amount of risks involved.

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