David Oliveira

My Business & Life Journal

Wealth

How to build wealth the smart way?

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You’re reading this blog post because you want to know how to build wealth, so I’ll get right to it.

build wealth

Disclaimer:

This blog post contains affiliate/referral links, which means that I might receive a commission when you decide to purchase any of the services/products recommended on this page.

Know Your Numbers

Do you have any idea how much you’ve spent last month on leisure, takeaways or clothing? Most people answer no to this question. If you answered yes then congratulations, you’re on the right path.

How much money did you spend on entertainment last month? I challenge you to stop for a minute and think about this. Try really hard. Entertainment isn’t just going to the movies. You should consider streaming subscriptions (Netflix, Sky TV, Prime), gaming and even your phone bill (where you spend time on social media platforms).

We all spend money on so many unnecessary things. I know, we cannot stop spending completely, but here’s an example. My children asked me to subscribe to Disney+, which I agreed to because it seemed a cool thing to have, but do they really use it enough to justify the cost?

Knowing exactly how much you earn vs how much you spend, is your first lesson to build wealth.

Make it a habit. Nowadays banks do this for you. Just explore your banking app and I am sure you’ll find some sort of expense tracking system. Alternatively, you can install a budget planner from your app store and get started sooner rather than later.

Try Starling Bank

I really like using Starling to track both my expenses and set money aside.

Open a bank account with them to see it for yourself. The cool thing about the Starling app is that you can create saving spaces (similar to a sub-account) and move money to those spaces either manually or automatically. It works really well. You can even create goals and specify what is the target amount for each of the spaces you created.

Personally, I have different saving spaces for Holidays, Deposit (for another house), Home Emergencies (for when my boiler or my washing machine go to heaven), Taxes (an estimate of my next tax bill). Every time I use my card, the app rounds up the change to the nearest pound and sends it to one of the saving spaces. I just love it.

Build Wealth by Saving Money

What about savings? How much did you save last month? Also a difficult question, right? How come you’re interested in building wealth, but you don’t know how much you’ve saved last month?

Saving money is the #1 rule of the "build wealth" game. Click To Tweet

How many rich people do you know? I know a few and they save money and track their expenses. To what they do, because it works.

Simply open a Savings Account and set up a weekly or monthly standing order.

Avoid Expensive Debt

Yes! I know you know what I mean.

Having a mortgage? That’s totally fine. Ten mortgages, even better. The problem is your credit card, your Littlewoods account, your Very account. All debts that have an interest rate over or 5% are bad.

Like, really bad. Pay of your credit and store cards asap.

Financial Education = Build Wealth Faster

You can and should use your credit card – it improves your credit score, but you should always, always pay it in full. Never use more than 15% of your credit card limit. The credit score companies don’t like that.

It’s so important that you start building good financial habits.

I always ask, why they don’t teach this stuff at school? My son is learning about all the different religions around the world and the Egyptians. Wouldn’t be better to learn how to budget and how to create a business plan?

Here’s an idea. Read books. Read as many relevant books as you can so that you become an expert. It could any field. Pick a topic of your interest and become an expert. As you read you’ll notice that learning will become one of your best skills. Start reading Personal Finance Books and you’ll become an expert in personal finance too.

Another idea. Watch YouTube videos. I like watching Project Life Mastery and Mark Tilbury, they are an awesome source of inspiration for me. There is a lot to learn with Warren Buffett too, he is one of the wealthiest men in the world.

Rich Dad Poor Dad

What the Rich Teach Their Kids About Money
That the Poor and Middle Class Do Not

Rich Dad Poor Dad is the #1 personal finance book of all time.

BUY ON AMAZON

Discipline Will Help You Build Wealth

If you want to build wealth, you must discipline yourself.

Think about what really matters and about your goals before you decide to take the day off to binge watch your next series on Amazon Prime.

Start a business and stick to it.

Save money and avoid useless shopping. Think about it. Do you really need the latest mobile phone every year? Do you really need a brand new car? You do not.

As you build up the habit of saving money, you’ll notice that it gives you joy and that saving money makes you feel good. The more you save, the more you’ll enjoy doing it. You’ll see your account grow bigger and bigger.

It’s awesome

Try to save at least 10% of your income. Once you’ve saved enough to support your life for at least 6 months, start investing.

Disclaimer

Please note that I am not a financial adviser. Investing is risky and your capital will be at risk. Please make informed decisions and consult an expert.

Start Investing Early

Every month I deposit money into eToro, Wealthify, CrowdProperty and Penfold. There are other platforms where I invest money, but these are my favourites. For me, the trick is to have these deposits automated. Because the money leaves my account at the same time as my mortgages and other bills, it doesn’t feel like I had the option to not make these investments.

The earlier you start investing the better.

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What if you can’t save money?

I know that for most people saving money is really difficult. Do you know why? Most people don’t know how to spend money. When it comes to leisure and unnecessary items, you should only spend the money that you don’t need. You should save and then spend it, not the opposite.

If you find it hard to save money, then it’s time to think about starting a side hustle to make some extra money in your spare time.

I do that too. Start here.

Now tell me, has any of the above helped you? If so, please leave a comment below to start a conversation. I hope you manage to achieve all your goals in life.

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