How to Become Rich: 7 Smart Strategies for Building Wealth – Yahoo Finance

Through a combination of paying off debt, budgeting, investing, and increasing your income, you can advance your chances of becoming rich and hitting your financial goals. In fact, the average age of millionaires is 57, suggesting that many successful people build wealth over time from diligent habits and financial savviness (especially if you don’t come from a wealthy family).

Let’s take a closer look at how to become rich and explore the steps that may set you up for future financial wellness.

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How to become rich in 7 steps

Self-made wealthy people don’t become rich by accident. Instead, they often take intentional actions to make money and build wealth. If you’re ready to take control of your finances, choosing and committing to a step-by-step plan often helps increase your wealth.

1. Identify your goals

Before you get started on becoming rich, devise a financial plan. Here are a few questions you may ask yourself as you put your plan together:

  • What does being rich mean? Is there a particular net worth I’d like to hit?

  • What is my monthly budget goal? Am I looking to put money aside to invest or to pay off debt?

  • Am I looking to achieve early retirement?

Get specific with your answers so you know your exact goals. Once you have your big-picture vision established, break it down into smaller short-term goals that are easier to achieve. By creating this roadmap, you should have a clearer sense of what your destination is and how to get there.

2. End your high-interest debt

Nothing drags down your hard work like high-interest debt. Total consumer debt balances increased 5.4% between 2020 and 2021, according to Experian, one of the three national credit bureaus.

Debt with high interest rates, such as credit card debt, can be challenging to pay back. Not only are you paying the principal amount you borrowed, but you’re often paying hefty interest charges as well.

To take control of your debt, start by listing all your loans from highest interest rate to lowest. Consider making extra payments toward the original loan amount on your high-interest debts first to minimize the total amount of interest you might owe by the time the debt is paid off. You’ll likely need to specify that the extra payment is for the original loan amount — ask your lender if there is a certain process you should follow when using this strategy.

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