How to Build Wealth and Get Rich

Before you get rich, you have to know what that means. How much money does it take to be rich? What dollar amount might qualify? You’ll find answers may vary.

Your definition of wealth may differ from someone else’s, so it’s important to know whether you’re looking for independence, security, status, or some other result, and how to know when you’ve reached it.

Understanding the target allows you to better prepare your strategy and adjust your expectations.

Learning how to get rich is no different than studying the piano or learning to paint. If you know the theories and concepts, you can put them into practice and then refine your technique. You’ll need to change the way you think about your labor, assets, and spending.

If you understand the philosophy of wealth, you’ll realize there is nothing standing between you and your dream but self-imposed limitations. The most important principle to remember is that your assets can earn an income, too—each dollar saved has the potential to bring in more in interest.

Money can work for you, and the more of it you employ, the more you can earn.

“How to Get Rich” isn’t a class they teach in school. However, learning these skills is important enough that you should make the effort on your own. There are a few rules for building wealth that will help you no matter how much money you make.

First, be selective in who you choose to marry. You’ll get farther if you marry a spouse with the same financial goals.

Minimize your debt. Even “good debt,” like a mortgage, can keep you from putting your dollars to work earning interest.

Live below your means, and make sure you’re saving for retirement. Don’t fund your children’s college experience at the price of your retirement savings.

Lastly, if you can, put off claiming Social Security as long as possible. You’ll increase your benefits for every year you can delay, getting up to 132% of benefits owed if you wait until age 70.

Once you understand the definition of rich, you may decide that what you are looking for is financial independence.

Once financially independent, you’re no longer tied to a job or employer; you’re free to do what you want because you’re creating your own income.

To reach financial freedom and say goodbye to paychecks and bosses, you need to think long-term. Look for income-generating opportunities while cutting your costs, and put the difference into investments. Also, fine-tune your tax strategy while exploring untapped niche markets to maximize your earnings.

Working for pay is active income, meaning the amount you can bring in is limited to the hours of work you do. But what if your income wasn’t tied to the hours you put in? That’s passive income, and it is a key component to building wealth.

With passive income, you can create cash flow without even having to get out of bed in the morning. Learn about the different types of passive income so you can start to build your net worth beyond what’s possible with a 40-hour workweek.

Don’t let gender affect your path to wealth. As you’re learning important rules for getting rich, also keep in mind some special considerations that might affect your mindset or your decisions. After all, women live longer than men by six to eight years on average, so you’ll want to make sure your investments will last.

For example, don’t give control of your finances over to a boyfriend or spouse. Resist the urge to splurge on things outside of your budget. Troublesome attitudes toward money can influence the way you save and spend, so it’s important to address them.

Do you want to spend your golden years enjoying life, living to the fullest without worrying about money or bills?

Follow this six-step guide to get your investments in order, minimize your tax liability, and learn how to identify income-producing assets. The power of compound interest helps you make the most of your investing dollars, so the earlier you can begin, the better.

The rich are different. The super-rich, or capitalist class, are very different.

How does the wealthiest 1% think differently about money? They understand dividends, diversification, and taxes. They don’t follow what the rest of the market is doing, and they view business as a game.

By studying the super-rich, you can learn how to get rich yourself.

Warren Buffett, one of the wealthiest people in the world, has a thing or two to share about getting rich.

His Berkshire Hathaway holding company is famous for incredible returns, outperforming the S&P 500 by almost double. His method is to invest money from his operating businesses into stocks in good companies, then hold them for the long term. You can approximate this method in your own life, as well.

The cartoon figure of Scrooge McDuck might be an unlikely role model for wealth-building—but you can learn important principles of investing from his comic-book stories. These financial parables will make sure you understand the sometimes complicated nature of investing for long-term gains.

The final step in your journey to getting rich just might be learning to get richer.

The truly rich—the unbelievably, drowning-in-cash, crazy rich—all have three things in common that vaulted them to the top of the net-worth rankings and made their names synonymous with prosperity. If you decide to not just get rich but build a fortune, you’ll need to know them, too.

The first step is to build or acquire a lucrative business, one that delivers great profits and has the potential to scale. Next, keep a firm claim on it—for example, Warren Buffet owns 30% of his Berkshire Hathaway holding company. Finally, the super-wealthy take advantage of favorable tax laws, and you’ll need to do the same if you want to join their ranks.