In America today, business is booming. In the past year, the stock market has hit record highs and shows no signs of slowing down. The unemployment rate is lower than it normally has been and anybody who wants a job can have a job. However, there is still a problem. 75 percent of Americans are still living paycheck to paycheck. Around 50 percent don’t even have $1,000 in savings. Since the crash of 2008, we have continued to see credit card debt as well as student loan debt rise like crazy. The good news is that for you, this debt and a poor financial decision can all be avoided. In this article, I’m going to be breaking down how.
1. Increase income
In today’s economy, you have to find a way to increase your income level. You can either get another job, start a side hustle, or incorporate a small business. Whatever the method, you have to have a way. The average millionaire has seven sources of income that has allowed them to build their wealth. Whether it be earned income, passive income, rental income, it all helps you at the end of the day. At the end of the day, focus 90% of your attention on increasing income and 10% of your attention on saving it.
2. Lower expenses
The problem in America is that as a person gets an increase in income, their spending level also rises with it. In order to build any sort of financial freedom and abundance in your life, you want to increase the spread between your expenses and your income. A good rule of thumb is that live off of 70% of your income and save the remaining 30%. This will allow you to build wealth much faster.
3. Watch the debt
This is a very common problem that I see many young people making. They end up financing and taking out loans for things they can’t afford and should have no business owning. Many young people finance cars, college tuition, mortgages, and a whole bunch of other things that end up hurting them financially. They can’t save a penny because all of it is going towards their debt burden. In the end, I would recommend buying a car in cash, going to a two-year community college, and splitting rent between a couple roommates. By doing this, it will positively affect your ability to conserve wealth and build wealth.