How You Can Manage Your Money to Get Wealthy

October 8, 2019 by Susan Paige

Financial independence is a great goal to have. You don’t have to be rich; you have to be able to live within means that allow you to save. Once you can start doing that, you start to see how your finances improve. Those leftover dollars can soon turn into a sizable portfolio. And that’s when you can really change your fortune.

How you manage your money can be the difference between a modest retirement fund and the key to your financial independence. Managing your money is about changing lifestyle habits and investing with purpose. Try these tips for managing your money better.

#1 Diversify Your Portfolio

A diversified portfolio is your best defense against market crash and a powerful strategy for improving yields while reducing risks. Investing everything in the stock market can show promising results at first, but come the first crash, all of that progress is wiped out.

Rather than let yourself get stuck in the boom-and-bust cycle, you can expand what you own into commodities, industries, and financial products that won’t be so hard hit.

#2 Buy Hard Assets

A great way to diversify is buying hard assets like gold. When you buy gold, you’re buying against uncertainty. It’s called a “safe haven asset” because it’s not affected by recessions the way the stock market can be. If you want to know where to buy gold, go online and search for bullion coins and bars. You can buy these for a small premium. Search for a place where you can buy gold at a minimal cost.

You can also invest in real estate. You don’t have to go all-in on one property – that’s a quick way to overexpose yourself. There are ways to invest small amounts in real estate if you feel like it belongs in your portfolio.

#3 Invest Automatically

Set up automatic payments into your investment funds. It’s easy to do; ask your financial advisor about setting up an auto-withdrawal from your bank account. There are also apps you can use that will automatically move a percentage of each paycheck into an investment account.

When you invest automatically, you can save without having to think about it. Pretty soon, you won’t even think of that money as something you could have spent instead.z

#4 Understand What Debt Really Costs

It’s one thing to trim your expenses, it’s another to make sure you really know how much you’re spending. Every time you rely on credit to make a purchase, you make that purchase more expensive. Interest rates mean that your purchase is much more expensive than the ticket price.

Rather than asking what the monthly payments are and deciding if you can afford them, you need to look at the true cost of debt and realize just how much you’re spending. Not seeing the cost of debt is how plenty of high-income earners wind up with no savings.

#5 Know Your Financial Goals

Last but not least, understand why you want more money. Wanting more money is an empty goal unless there’s a reason for it. It becomes a competition or a numbers game, where you simply accumulate for the thrill of accumulation. That can lead to unnecessary risks or depriving yourself of your own wealth. Before you start investing, define your financial goals. Decide how you want money to change your life.

Money management is the key to building long lasting wealth.

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