(upbeat music)
- [Narrator] If you're like most people,
you might have wondered what it takes to get rich
and become a millionaire.
At thecollegeinvestor.com, we respond to 1,000's
of reader comments and see common themes that either help
the person grow wealth or prevent them from getting rich.
Getting rich isn't easy and doesn't happen overnight.
However, there are some habits and behaviors
or rules that can guide you along your way.
Here are our 10 rules to getting rich
and growing wealth over time.
Rule number one, you have to earn it.
If you want to get rich and grow wealth,
you have to earn it.
If you want money, you have to get out and start making it.
Get a job, get a second job, get a third job.
Are you in college?
Get a job to pay for school
The bottom line is that if you want to grow wealth,
you have to earn income.
There are 1,000's of ways to do it
and nobody is standing in your way.
Rule number two, save until it hurts.
The second rule to getting rich is saving.
You can't just spend money like a celebrity
on a shopping spree.
You have to save until it hurts.
Saving 40 to 50% of your income might sound impossible,
but it can be done, and if you are truly following
rule number one, this will be a lot easier.
Remember, if it doesn't hurt, you're not saving enough.
Rule number three, optimize your spending.
Most people like spending money,
and the rich are no exception.
The difference is that truly wealthy people optimize
their spending, meaning they look for and find good deals.
Even if they are buying a Ferrari, they shop around
and negotiate a good deal.
Whether buying cars, real estate, or healthcare,
the wealthy make purchasing decisions that maximize
their benefits and minimize their expenses.
Rule number four, put your money to work for you.
After you earn your money, you need to harness the power
of compound interest to make it grow,
meaning you need to invest, why?
Because the average inflation-adjusted return
for the S&P 500 for the last 60 years has been 7%.
Compound interest allows your money to grow
at an exponential rate, creating passive income streams
for the future.
Rule number five, marry smart.
The fifth rule for building wealth is to marry smart, why?
Because a great spouse can be a huge force multiplier
when it comes to building wealth
or a wealth destroyer during a divorce.
In fact, a recent study found that divorce an destroy 75%
of your personal net worth and 40 to 50%
of marriages end in divorce.
A great duo can earn together, accumulate wealth,
and enjoy double earnings compounded over time.
Divorce, on the other hand, is a wealth destroyer,
costing you 50% of your assets and earnings,
lawyer fees, and more.
Rule number six, minimize your taxes.
No matter your income level, minimizing your tax liability
is a key step to earning and maintaining wealth.
Taxes can prevent you from getting rich
by consistently eating away at your income.
The S&P 500 posted an average annual return
for the last 30 years of 11.09%, but after taxes, fees,
and inflation, you could only see 54% of your return.
By taking advantage of tax-deferred investments like 401k's,
individual retirement accounts, and health spending accounts
you could save yourself a lot of money.
Rule number seven, insure yourself and protect your family.
Protecting your family means more
than just buying life insurance.
You need to be prepared for every emergency
to avoid financial peril.
Having health insurance can spare you the financial ruin
from a sudden health issue or hospital stay,
and disability insurance can cover your earnings
if you suffer an accident and can't work.
If you want to get rich, you should purchase
these insurance products at minimum.
Health insurance, life insurance,
short-term and long-term disability.
Rule number eight, take care of yourself first.
When it comes to building wealth, you have to take care
of yourself first even when dealing with family.
This can be really hard for some people,
especially those that didn't have much
because now you have something to share.
If you start stacking cash,
others will see and ask for favors.
If you want to help others, make sure you've put yourself
on solid ground first and have followed all the rules
before giving into your generosity.
Rule number nine, surround yourself
with people better than you.
The ninth rule to get rich is to surround yourself
with people better than you in all aspects of life.
Marrying upward, following career mentors,
and finding friends that make you a better person.
Drop the moochers, the haters, and the lazy acquaintances,
and distance yourself from bad influences.
Remember, you don't have to settle
for the life you were born into if that's not what you want.
Rule number 10, it's okay to go slow.
Remember, when building wealth, it's okay to go slow.
If you're under 30, you might be waiting
for the next big thing.
The next job, the next milestone, the next big paycheck.
Getting rich doesn't happen overnight.
Focus on what you're doing today
to get to where you want to be.
Remember that building wealth takes time.
It's about earning today and leveraging time tomorrow.
For more information on how to grow your fortune,
visit thecollegeinvestor.com today.