6 Ways To Become Rich on an Average Salary

6 Ways To Become Rich on an Average Salary

Sean Bryant   Fri, August 25, 2023

Are you ready to take control of your finances and reach financial success? It’s not as complicated as you think, even with an average salary. Becoming rich is achievable when you commit to making smart money moves and have the right financial strategies.

In this article, we’ll discuss some of the best things you can do to grow your wealth even with an average salary.

Start Early

You’ll hear this all the time, but starting early is the best thing you can do for yourself. The sooner you start investing for retirement or open a taxable investment account, the better off you’ll be.

The reason for this is compounding returns. If you start at age 23, you only need to save $14 per day to become a millionaire by age 67. However, if you don’t start until 40, it would require $42 per day. This is assuming your portfolio has an average annual return of 6%.

“According to the Rule of 72, should your investments yield a 10% rate of return, your principal amount is projected to double approximately every 7.2 years,” says June Jia, Owner of Canny Trading and investment banker at GF Securities. “This represents a substantial accumulation of wealth over time.”

Jia discussed the importance of regular investments. “Adopting a disciplined investment approach, such as dollar-cost averaging, can enhance the pace of wealth accumulation by consistently allocating funds to your investment portfolio.”

If you start early, you can invest small amounts of money and still build a sizeable portfolio by retirement.

Prioritize Savings

We live in a world where online influencers discuss the latest fashion trends or must-have gadgets. This can lead some people to spend more money than they might have otherwise. If you want to become rich with only a modest income, you need to prioritize savings. It’s important to have an emergency fund if you want to build wealth. This provides financial security if you lose your job or incur a large expense like a medical bill or car repair.

Once you determine how much you can save each month, make saving automatic. You can set up a direct deposit from your paycheck or schedule automatic transfers from your checking account. Automating savings will remove the urge to use those funds for anything besides building a cash cushion.

Reduce Expenses

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