Now that the holidays are behind us, we all get to work on the goals we set for 2018. And just a reminder – when you write your goals down, you are 42% more likely to accomplish them (go get something to write on – quick!).

So if you set a goal to get rich in 2018, I wish you all the best. For me, I’m not as concerned about being rich as I am about building wealth. So what’s the difference?

If you have riches, that’s great but maybe not sustainable – when its gone, its gone. Wealth is more stable. Having wealth means you have assets that you can leverage to gain more wealth. For example, using the equity in a home you own to purchase another home.

So, how does one go about ‘building wealth’? I’m here to tell you, you only have to do four simple things to build wealth. The caveat is: you have to do all four things for it to work. If you only do three or two, it will be helpful but most likely not sustainable.

Step One: Make a Decent Wage
You don’t have to have a six figure salary to build wealth, just an income. If the income you have isn’t enough for daily living expenses consider ways to change that, Things like additional training or education can help with that. You might consider starting a small business, even something small you can do in your spare time to raise some funds.

Step Two: Spend Less Than You Make
Sounds easy, right? This is the hardest one for most of us. There are lots of ways to accomplish this one though. Create a usable spending plan, shop with a list and stick to it, start an emergency fund, don’t rely on credit, make wise consumer choices. I could go on, but we will delve deeper into that subject in a future blog.

Step Three: Make the Money You Don’t Spend Work for You
Step three is just a natural follow up to Step Two. So when you spend less than you make, the rest can be used to earn interest (how nice, instead of paying it!) and dividends. Look for savings tools like high yield savings accounts to hold your emergency fund. Set up automatic transfers to separate accounts for your goals savings. Max out your 401K or simply start a retirement account. Check out other investments that interest you. This step is necessary because, like Warren Buffet says, if you don’t find a way to make money in your sleep, you’ll never retire.

Step Four: Protect Yourself From Loss
Loss happens – things break and need to be repaired, kids get sick and need medicine, accidents are more common than we like to admit. There are lots of ways to protect yourself from these losses. Some are free, like excersizing more, eating healthier, locking doors, etc. Some have costs, like insurance, but start incorporating some of those loss prevention techniques. That way, when life tries to knock you back a few steps, you can recover faster. You can be prepared and get moving forward again toward your goal of building wealth.

If you have more ideas on ways to accomplish any of the four steps, I’d love to hear them. As you mull this over, just keep in mind that it takes all four steps to build wealth. If you just do one, two or three, the fourth you didn’t pay attention to will undermine your goal. Lets all take steps to build wealth this year!

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