In a world where the parameter for measuring wealth is some arbitrary
number the term rich can be confusing unless you've hit the millionaire mark
it's easy to feel inferior or even average compared to your peers but
comparison aside most of us are more opulent than we give ourselves credit
for which is why in this video i'll be sharing with you seven signs you're
richer than you think sign number one you save some money every month at the
heart of every rich person's financial hobbits is saving money turns out saving
money is so challenging that only top income earners can afford to do it
consistently saving is therefore the strongest indicator that you earn more
than you spend and that you have little to no debt but what's the link between
saving and wealth according to financial experts cultivating a saving culture is
the first step towards attaining financial freedom in fact rich people
are known to save at least 10 percent of their total income throughout their
lifetime not only is it a way to secure one's future but one can acquire assets
because of consistent savings how might you ask here's how in a nutshell
building wealth involves three critical steps earning saving and investing once
you determine a budget that works perfectly for your income and lifestyle
you need to start thinking about securities to invest in let's say you're
saving 500 every month you'll have 6 000 at the end of one year if you invest
this amount in an index fund with a 10 average rate of return you'll earn an
extra 600 every year given all things remain constant and the more money you
save and invest the more you'll amass sign number two you don't stress about
your bills bills are considered the official stamp of adulthood but how many
people can handle them without straining if you're among the few who can handle
all bills like a boss then that's a blaring sign that you're rich bills tend
to take up a significant portion of most people's monthly budgets utilities like
water electricity heat and gas can consume up to three inch dollars every
month depending on where you live and what your utility needs are if you
include the cost of rent car payments and groceries you'll find that you can
easily spend up to 200 or more on bills alone paying bills on time therefore
calls for a high degree of financial discipline and planning if your bills
trigger stress and anxiety then it's high time you looked into your financial
habits the first step is to create a personal budget that you can implement
religiously a budget makes it easier to track your expenses and seal any cracks
through which you might be losing some coin and if you find that your bills
outstrip your income it's time to look into more economical options this can
mean opting for public transport even more or moving to a cheaper neighborhood
or even getting rid of anything that isn't a needed item however assuming
you're unwilling to downgrade your lifestyle you could also explore
additional income streams with money flowing in from different directions
you'll still be able to take care of your expenses in the event one source
dries up diversifying your income sources guarantees financial security
and reduces your chances of piling up debt if you lose your primary income
source sign number three you don't have high interest debt is your credit score
anything above 720 congratulations you are officially rich the truth is the
fleeting thrill that accompanies signing loan documents is the biggest solution
of all time high interest debt steals from your future and impedes your
long-term financial goals owing too many people too much can also hurt your
credit score and dim your chances of securing better loans in the future
although some people disagree with the notion of debt freedom corresponding to
wealth the ensuing liberating feeling after you wipe out your mortgage or
student loan is unrivaled besides sleeping better paying off your debt
also gives you total equity on everything you own equity in this case
refers to the difference in value between the actual worth of an asset and
the portion of this amount that you still owe let's take an example of a car
when you purchase a car on a loan you technically don't own the car until you
pay off the entire loan amount so assuming you had taken a 40 000 auto
loan that accrues 10 worth of interest your car seller can repossess the car if
you're unable to clear the loan in due time so you're not just losing 4 000
through interest every year having high interest out like this one means that
you also run the risk of losing your possessions if you default unfortunately
all these worries can spike up both physical and psychological problems
actually high interest that is the leading cause of chronic stress and
other life-threatening diseases like high blood pressure and heart disease
and as you know there's no more fantastic form of wealth than being in
good health therefore the ideal situation is to unchain yourself from
any high interest debts that threaten your net worth and your health whether
it's a mortgage car loan or credit card debt anyone who manages to clear or
evade them all is without a doubt rich sign number four your net worth is
increasing most of us perceive the ideal net worth to be anything that has a
million in it but this is largely inaccurate no matter how small
progressive net worth is a strong marker of financial success how do you
determine your wealth it's as easy as pie add up the value of all your assets
and subtract your liabilities assets include any valuable things you own
think real estate properties liquid cash shares in the stock market or other
valuable personal belongings like art and jewelry liability on the other hand
is the state of owing another party liabilities therefore will include bank
loans mortgages student loans or pending credit card bills negative net worth
points towards a state of debt while positive net worth is a hallmark of
financial stability but why are these figures important anyway essentially net
worth is used as the arts deck for measuring how rich or poor one is your
net worth shows you everything you own in your life
run down in the numbers it reveals all the assets you've acquired since you
started generating an income plus all the parties you still owe money to not
to mention the more assets you have the higher net worth you'll have and vice
versa tracking your net worth is also important because it reveals how you
spend your money a negative or decreasing net worth reflects poor
spending habits or bad investment decisions this can act as a wake-up call
for you to change your investment strategies or cut down your spending in
a bid to minimize debt lastly tracking your net worth is a significant
motivating factor for your financial journey improving your net worth will
instill a sense of accomplishment and pride having valuable assets whether
your house or retirement savings is a tangible reason to keep pursuing the
ultimate goal sign number five you continue to accrue assets if you notice
that your assets have shot upwards in the process of tracking your net worth
take it as a green light to continue doing what you're doing accruing assets
is one of the smartest strategies towards financial freedom for one income
generated from assets tends to be consistent if left to build up over time
this amount can help increase your net worth significantly to further increase
your odds of becoming even wealthier you should diversify your asset portfolio
however this is often easier said than done the idea of asset diversification
poses a challenge to most investors why choosing the best income generating
assets is hand down confusing making the right decision means you'll have to
consider multiple factors including your risk appetite time and capital
regardless we have certain asset classes that cut across as profitable for
instance investing in the s p index fund is a foolproof stock investment approach
that will deliver high long-term returns the average compounded annual return for
stocks and equities is about eight to ten percent so assuming the value your
portfolio increases by 10 percent that's a massive profit to count right now
imagine if you own multiple investments with similar return rates even without
liquid cash in your checking account you still qualify as rich because you have
financial security with that said some of the best income producing assets to
invest in include rental properties stocks bonds and reits sign number six
you're on track to retire on time are your retirement goals on track this
question can help you determine your financial outlook the truth is financial
independence is a goal that many people chase viciously we all long for the day
when we won't have to work for us to be able to generate an income however it's
only a few people that have their retirement goals on track most employees
tend to wait until it's too late before they set up a retirement fund so if
you're under 60 and you built a nest egg that can support your lifestyle beyond
your working years here's your free pass into a wealthy town
but who or what determines whether one is financially equipped for retirement
does it imply having a million dollars in your retirement account maybe but
it's not the only thing besides the thriving retirement portfolio early
retirees tend to share specific financial traits that you can use to
test readiness for retirement the first one is debt freedom if you've wiped
clean your debt sheet and you owe no one that's the first time that you're
eligible to ditch the steady paycheck high interest sets like credit card
loans and mortgages can quickly drain your retirement savings hence you're
better off getting rid of them before retiring clearing your debt also frees
up your budget so that you can pump more funds towards your retirement account
secondly those who retire on time always have a robust emergency fund to cover
emergencies such as health keep in mind that your employer benefits will be
non-existent in your retirement years since most house failures don't come
knocking it's safer to have a good plan that will help you cover your medical
bills lastly most of the retirees kick-start their own retirement plans
early getting an early start enables you to benefit from compound growth which is
basically free money finally remember this one thing the earlier you start the
better sign number seven your mortgage free having total equity over your home
is perhaps the best form of financial security being mortgage-free whether
you've never taken on one or you just finished paying yours off comes with a
wide range of benefits the first is that it offers a soft cushion in the event
the real estate market gets shaky many homeowners worry about being able to
balance their mortgage payments amid a market recession for example if you end
up in a situation where you're distressed for cash you need to sell
your home urgently doing so during a market slump will conjure up losses and
with a mortgage in tow you probably have a claim to a small fraction of the
proceeds however when you're mortgage-free you'll have full access to
all the profits coming from the sale of your home another benefit of being
mortgage-free is that it comes with a financial freedom to pursue other things
not only will you save a ton of cash in terms of interest but you also have that
freedom to live anywhere you want since nothing is tying you down how awesome is
that sadly though most people will never become financially free because they
haven't figured out how to make money while they sleep however in this next
video i will show you step by step how you can start earning passive income
this year and build a passive income lifestyle you know you deserve click on
over and let's get started