October 12th, 2009
7 Ways To Get Rich Slowly
Becoming a millionaire seems like an impossibility since the past decade’s get-rich bubbles in real estate, dotcoms, and stocks have burst and left most Americans worried about earning a regular salary, let alone millions.
Becoming rich won’t happen overnight, but it can happen over time. It takes good, consistent habits and before you know it, you’ll be a lot closer to millionaire status than you were before reading these 7 tips:
- Finally get rid of your debt! Your credit card debt is a black hole of interest and never-ending, unpaid debt for all your hard-earned savings. The average American carries a $6,000 balance on their credit card and a typical credit card APR is 14.9%, so if you paid the minimum payment of $100 a month, it would take little over 9 years to pay off your balance. On top of that, you will have racked up $5,074 in interest charges! Start focusing your current cash flow on paying off your debt now so you can avoid potentially paying double your original debt in interest charges in the long run.
- The old piggy-bank method, reinvented – Let’s take out the calculator again, but let’s focus on saving rather than debt reduction. If you saved $500 a month and put it in a savings account like Ally Bank’s high-yield 1.75% APY online savings account, in 10 years you will have $60,553.84 saved up! If you keep this up for the next 45 years, you’ll be sitting on a $270,000+ nest egg when you retire. Or you can opt for a CD with an even higher interest rate, like Discover’s 3 year CD with 2.75% APY, which will yield a whopping $430 in interest with an initial deposit of $5,000 by the end of the CD’s term.
- Trade your credit card for a debit card, secured card, or cash – There is nothing evil about a credit card, as long as you know how to use it responsibly. For consumers overspending on credit or paying late or not at all, sticking to credit card alternatives like a debit card, secured card, and cash is the best way to avoid the debt and interest charges and keep up a healthy credit report. And seeing your spending directly shrinking your bank account might make you think twice about your purchases.
- Shop around for loans – Not all loans are alike, and with a little bit of research and comparing, you can save a substantial amount of money by looking for a loan with the best terms and rates that fit your needs. If you are a student, use SimpleTuition to do all the loan searching and work for you. For any other type of loan—from opening up your first restaurant to paying off your car—check out Prosper and Lending Club for a person-to-person lending platform that has reduced rates for lenders (as opposed to going to a bank) and are perfect for short-term and smaller loans.
- Invest! – On that note, you can also invest in the P2P platform of Prosper and Lending Club to get a high rate of return, ranging from 8-20%, while also helping out fellow consumers.
- Cut a little, save a lot – Start making coffee at home and deposit the $4 you would’ve spent every weekday morning in a savings account, and within a year you will be $1,008 closer to becoming a millionaire. If you usually eat out for dinner and opt to go out 2 times a week and cook the other 3, that adds another $3120 a year to your savings. If you want to take this saving thing seriously and cut out your annual Tahoe ski trip and New Year’s Las Vegas trip, your “staycation” could save you another $3,500+ or more. With these three suggestions, you could savea possible $7,628 to deposit to your piggybank.
- Sell on eBay! – Think you have nothing to sell, it’s too complicated, or it takes too much time? Millions of people buy and sell on eBay and millions of dollars are exchanged because it can be profitable and effective if you do it right. Check out this blog, “Sell it Now—how to make hundreds of dollars in 37 minutes,” and see how to make your mint-condition Beanie Babies collection can help make you a millionaire.
Start Today
Getting rich slowly may not be your ideal way to hit seven figures, but it’s certainly the most practical and realistic. Building your personal wealth is hinged on simple ideals of saving more, spending less, dealing with debt, and being financially responsible over a longer period of time.
Related posts:
- Personal Finance Terms from The Intern Lesson 1: As a personal finance writer, I have to learn and fine-tune my financial services lexicon if I am...
- Alternatives to Credit Cards: Stay debt-free when you spend! Credit cards’ days may be numbered. Consumers are switching to debit cards, pre-paid cards, secured credit cards, and online cash...
- 6 Steps to Say Goodbye to Debt In August, the average American had $6,775 in credit card debt–this does not have to be you. Living with debt...
- Credit Karma Weekly Round-up: Updates on the Financial Front Do you know how the economy is doing nowadays? Is there still a credit crunch? And can your credit score...
- Chase Blueprint Review: Putting Payment Power In Consumers’ Hands Chase Blueprint is betting that, by empowering consumers to manage their debt and plan their spending better, Chase can gain...
