Investopedia lists three simple steps to building wealth as follows:
- You need to make it. This means that before you can begin to save or invest, you need to have a long-term source of income that's sufficient enough to have some left over after you've covered your necessities.
- You need to save it. Once you have an income that's enough to cover your basics, you need to develop a proactive savings plan.
- You need to invest it. Once you've set aside a monthly savings goal, you need to invest it prudently.
Hmmmm. These three sound familiar.
The site ESI Money has these three steps listed as the key parts of his site. In fact, they are even in the name. ESI stands for:
Basically the same steps as what Investopedia lists.
Of course the path to wealth is simple and well-known.
I have written my own post on how to get rich in three easy steps and books like The Millionaire Next Door: The Surprising Secrets of America's Wealthy and The Richest Man in Babylon do the same (though they have more steps).
But the basics are always the same:
- You need an income of some sort -- the higher, the better. And you need to work on growing it.
- You need to spend less than you earn.
- You need to invest what you save to grow it and drive your net worth.
That's it. Three simple (but not easy) steps.