10 steps to build wealth

When I think of how to build wealth, come to my mind the following words: consistency, common sense time and will.

Saving is not easy, it requires the commitment of everyone, needs to be systematic and be clear that only creates wealth over time (not overnight). On the other hand, depends only on yourself.

There are a number of steps, if met, would help many people to build wealth.

1. Spend less than you earn

It is the simplest rule of all. However, there are many people living beyond their means. Spending more than we earn, leads us to enter into debt and, once we go into debt, it is more difficult to save.

One tip that can help you to comply with this rule "does not work to pay that mortgage, loan, buy clothes / food, school expenses, dining out, holidays and then, if there is any money left, save" NO, first turn away an amount of my monthly income and then come the bills.

The best thing is to look like saving a percentage of your income. The amount you put it and adjust your monthly budget to cut spending and to save. It is important that you feel comfortable with the percentage of savings.

2. Sets the objectives you want to get

Everyone saves for a purpose (travel, canceling mortgage, education, retirement, etc ...). If we have a clear goal for which we save, we know two important things:

• Amount we need to save: the more money you save the more money you get in the future
• Time we have to save: The less time I have left to achieve the purpose for which I'm saving, the less I can save. The more time I have, the easier it is to design a savings plan
• Profitability: the more time is left for our purposes, the lower the amount I have to save and lower the returns that have to require my investment. If I wait 55 years to save for retirement, the less time I have to create that wealth, the greater the amount I have to save, and the greater the return that I will have to require my investment.

The wealth is only created over time. It is impossible to have eg the € 100,000 overnight, unless we win the lottery.

3. Save money every month

After determining the purpose for which I save and determined the percentage that will save every month we can invest those savings on a regular basis.

Most important is the discipline , want to save and be aware that we do not save for others but for ourselves.

4. Invest the savings properly

After determining the amount that I save is time to invest what I'm saving. What products invest?

That depends on the purpose for which we are saving, time saving and we ourselves (what we call financial advisors risk profile, basically, is the stomach that I have to endure some fluctuations on our investments).

If we want to save properly, we should invest in current accounts , deposits or money market investment funds

5. Invest regularly

Investing on a regular basis allows us to benefit of compound interest, ie the return we get periodically by our investment, which in turn generates higher returns year after year. 

6. Diversify

One of the basic rules of investing is not putting all your eggs in one basket. Interestingly, it is the rule that most investors fail to comply (use all their savings to buy a house, all their savings in Microsoft, all their savings in stock market).

One of the advantages of mutual funds is that they allow us to diversify our investment regardless of the amount we're saving

7. Remain calm

In the short term, no one knows what is going to do this or that action, so guess what you'll do the whole market thoughts about mission impossible. Investing on a regular basis, eliminating the possibility of being wrong at the time input and make our investments more stable and do an average cost, we bought the stock is expensive or cheap.

8. Start saving

Delaying the start time is an excuse (we all have different mortgage or expenses). The less time I have left to achieve the purpose for which I am saving, least I can save.

The earlier you begin, the more time you have, the more you save, and the easier it will create wealth.

5 years delaying the start of our savings can be assumed that within 20 years we will have 40,000$ less

9. Buying and selling in the stock market (trading) does not generate wealth

The evolution of short-term actions are unpredictable, so consistently hit our choices of purchase / sale is more like a gamble than an investment. Invest when prices are low and sell when they are high is what we should do all but, unfortunately, is impossible to know when the market is expensive and when it is cheap.

And if anyone knew what the stock market will do tomorrow do you share with others or shut up and invest it?

10. Be consistent

The only way to manage your money is wisely and do it consistently. The money grows in the long run if you manage properly and wisely.