1. Try to spend less
Keeping expenses low without sacrificing the quality of life can help you spend less. It is good to spend money on things that give lasting benefits and add value. Do keep try to keep healthy because ‘health is wealth’. Try to avoid spending more than you earn. This is not to say to be stingy and fearful of money as this is an extreme state of the mind.
2. Keep an emergency buffer
Have a buffer or cushion or an emergency buffer that you can always have quick access to. It can vary from equivalent of 6 to 12 months’ salary; however, this all depends on individual circumstances. Money definitely buys freedom so aim to have some in an account that you can access. Try to stick to the buffer number and do not let it fall below the specific number. This buffer amount is not for investing. Inflation might eat into this money but this effect should not be too grave if you have other ways of saving and investing. An emergency buffer will make you have access to money to cover unforeseen circumstances. Having a buffer will keep your mind at peace. That is the power of independence.
Depending on how knowledgeable you are on investing, start to put some money on the side. If you are trying to overcome the fears and barriers of investing, speak with your investment coach to help you work through this. A good coach will reduce the fear of investing by providing a big picture overview of money, investing, and wealth building. This can include help with budgeting, saving, and tax-reduction strategies as well as investing strategies.
Speak with your financial advisor if you do not need a coach but make sure he or she has fiduciary responsibility, that is, acting in your best interest.
4. Diversify Your Income
Investing is about building wealth and not about making money. If you currently invest, then reinvest the dividends e.t.c you get from it. The beauty of compounding is great.
You are working today to earn money. In addition to diversifying your investment portfolio, it is also good to diversify your income. Diversifying income means having your income from different streams which can be by selling something online, providing value in exchange for money etc. Generate cash and then invest it in assets such as non-financial and financial assets to build wealth.
The best education is to invest in yourself!