23 Personal Finance Tips to Help You Start Building Wealth

Like Robert Kiyosaki once said…

“Money without financial intelligence is soon gone.”

Guess what? He’s spot on.

But, the good news for you is that financial education is everywhere.

And there’s no better place to start than with us.

Here are 23 crucial personal finance tips you need to know, to start building wealth.

1. Avoid Lifestyle Inflation

“I’ll start saving money when I’m earning more.”

That’s not how it works.

Making more money doesn’t fix poor spending habits.

Because you start making more, doesn’t mean you should spend more.

Increasing your lifestyle without increasing your investments will make your increased income redundant.

2. Surround Yourself with Positive People

Create a network who discuss opportunities to make money, rather than spending.

A synergistic relationship means you & your circle are using each other for good.

Instead of being detrimental to each other’s growth.

3. Material Possessions Are Not a Sign of Wealth

Everyone will soon realise that material goods aren’t as meaningful as once thought.

Material things won’t make you happier, and are likely to only burden you.

Take a lot of consideration when making large material purchases.

Are you buying something because you want it, or because you want to look wealthier than what you are?

4. Always Consider the Opportunity Cost

If you make $20 per hour…

• That late night out isn’t $300. It’s 15 hours of your time, or 2 days of work.

• That shiny new car isn’t $50,000. It’s 2,500 hours of your time, or 357 days of work.

Time is your most valuable asset. Are these things still worth it?

5. Get Your Credit Score In Order

Having a good credit score makes life much easier, and will save you thousands.

The higher your credit score, the more likely you will get approval for loans.

Your score helps lenders assess how much of a risk you are.

If you are a high risk, you’ll have a hard time finding a lender to let you borrow money.

6. It’s What You Do With Your Money That’s Important

It’s not about how much you make, it’s about how much you save and invest.

Someone who earns $4,000 per month & saves $500 monthly, is wealthier than someone who earns $8,000 but saves nothing.

It’s your disposable income, that defines your financial health.

7. Create Multiple Streams of Income

From dividend stocks to a side-business or side-hustle.

Open up as many streams of income as you can, so working 40+ hours a week becomes a choice, and not an obligation.

It’s better to create many sources of income, because only having one, is one away from zero.

8. Marry The Right Person

Who you choose to marry is one of the biggest financial decisions of your life.

A mistake can cost you a lot of money.

Making the wrong decision can cost you time, peace and legal fees, or some poor spending habits in general.

9. Health is Wealth

Many costly problems can be a result of poor sleep, lack of exercise or bad nutrition.

Medical bills are expensive and can add up.

Take care of yourself, physically & emotionally, and you’ll be in a better place financially.

10. Establish An Emergency Fund

Unforeseen events occur all the time, and are a pain in the… you know what.

Everyone needs an emergency fund so that you have access to money in a pinch.

Have at least 3–6 months expenses saved up in case of any unexpected events.

11. Don’t Buy Liabilities Just to Look Wealthy

People often spend all their money buying things they don’t want, to impress people they don’t even like.

Invest in assets to put money in your pocket, rather than taking money out.

12. Pay Off High Interest Debt

Not paying off debt delays wealth creation & hurts your ability to invest in your future.

Consumer debt robs you of your future, because you are using money you earn today to pay off things from your past.

Debt is one of the biggest liabilities you can have… try to pay it off ASAP.

13. Invest For Your Retirement

Retirement isn’t an age, it’s a number in an investment account.

Investing for 20 years may be hard, but being old & broke will be a lot harder.

A Roth IRA (US), or a Stocks & Shares ISA (UK) is a powerful way to save for retirement, and allows your money to grow tax free.

With these, you aren’t taxed on capital gains or dividends, and not taxed when you make a withdrawal.

14. Spend Less Than You Earn

By being frugal, you’re being more resourceful with money.

Being frugal is prioritising your spending on what is important to you in life.

Your disposable income is what’s going to help you achieve financial freedom.

Whilst increasing your income, it’s as important to look at where your money is being spent.

15. Educate Yourself

Learning about everything on personal finance & investing.

Your wealth will grow in abundance, sometimes without the need for any significant action.

Being financially literate will change your life.

16. Increase Your Income with a Side Hustle

Many income generating hobbies or skills that people can learn can replace scrolling social media for hours.

Anyone can learn anything if they put their mind to it.

Create multiple sources of income so that you get paid more than 12 times each year.

17. Create Goals and Hold Yourself Accountable

Figure out what you want, align your actions to your goal, and hold yourself accountable.

Create a strategy and maintain a long-term mindset throughout.

The blueprint to building wealth is simple:

1. Finding ways to increase income (with side hustles etc.)

2. Finding ways to spend less than you earn (by being frugal/creating a budget)

3. Investing the difference.

It’s not about how much you make. It’s what you do with it that matters.

18. Find Ways to Reduce Expenses

The quickest way to increase disposable income is to reduce expenses.

You can start this by creating a budget.

Disposable income is a modern day cheat code, and it’s going to unlock many opportunities.

Investments, businesses, books etc. are things you can buy with your disposable income.

19. Understand Inflation

Everyday your money sits in a bank, you are losing money.

The richest 10% of Americans own 90% of all stocks, the bottom 90% own 10% of all stocks.

Those that own assets become richer with inflation, as their assets go up in price.

Those that own cash become poorer with inflation, as their cash is losing value.

20. Budget Your Money

Creating a budget can help you better track your money.

Not having a budget can make it difficult to have control over your spending.

You can make a budget in minutes. It’ll help you find ways of reducing your spending & increasing your disposable income.

21. Start Investing Early

“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” — Albert Einstein.

If you don’t know where to start investing, buy an Index Fund that tracks the S&P 500.

You can have over $1.3 million when you’re 60, if you invest $100 a week ($400 a month) into an S&P 500 index fund at 25. A fund which historically earns around 10% per year, on average.

If you invested $10,000 in an S&P index fund, and contributed $10,000 a year for 20 years…

You’d have invested $210,000, but this would’ve grown to $793,275 based on the S&P 500’s 11% rate of return compounded.

22. Don’t Buy Too Much House

If you take on too high of a mortgage payment and fall behind, you risk foreclosure.

If you take on too high of a rent payment, and can’t keep up, you risk eviction.

You could end up homeless from overspending on housing.

Acknowledge the idea of potential inflation & don’t move into a place you can’t afford.

Make sure you’ve done plenty of research before buying a property.

23. Don’t Buy Too Much Car

If the cost of your car payment is higher than your credit score, you don’t need it.

Don’t overspend on an expensive car, to drive to a job you hate.

Sure, we all love fast cars, but be sensible, and don’t buy a liability that would be detrimental to your future wealth.

Like any large buy, research on buying cars is key.

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