How to... Get rich
It's easy to make a fortune: deal in stocks and shares, start your own internet
company, win the lottery. Right? Wrong.
To even be in with a chance of getting rich requires clear thinkingFrom How To Do Just About Everything to Succeed, in association with eHow (Collins, £9.99)
Steps
- Decide what 'rich' means to you. Does it mean money for everything you need? Money for everything you want? Enough to retire and stay where you live now? Enough to retire and live in the South of France?
- Start saving. Most experts agree that investing 10 to 15 per cent of your gross monthly income will create a comfortable nest egg for later years.
- Take advantage of compound interest - earning interest on your interest by letting investment returns accumulate and build on themselves.
- Be conscious of cost. For example, if you buy a second-hand car instead of a new one, and invest the balance, you will have thousands of pounds more when you retire.
- Take care of yourself. This will reduce medical costs later in life, as well as extend the years you can work - and save.
- A better education is more likely to result in high earnings. Some studies have shown that graduates are likely to earn an average annual salary of £15,000 more than those with no higher education. The gap is even higher for holders of a postgraduate degree.
- Get married. Married people are generally healthier than single people. Plus, they can economise on expenses, and they have more to invest. And because married people live longer, they can work and save longer.
- Enjoy yourself. Don't be so concerned with amassing a fortune that you neglect to enjoy life now. Strive for balance.
Tips
Use a planning
calculator (you'll find these on many personal finance web pages) to work out how much
you need to save each year to achieve a specific goal.
Little expenses add up. Switch to regular coffee each morning, rather than a double-shot
latte, put the pound you save in a fund, and you could have up to £50,000 more at
retirement.
Work out how much you'll need to maintain your current lifestyle. Ask a financial adviser
for help if you need it.
Warning
Don't waste the money you do have on 'get-rich-quick' schemes, lotteries or gambling.
Why not chat to other iVillagers on the Money Matters message board. Take a look at some of the LIVE discussions taking place on the message board right now:
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Created: 05/10/2004 Updated: 05/10/2004
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