We all want to be rich, don’t we? Or, at the very least, in a position where we don’t have to scrimp and save in the future. When looking for ways to build our wealth to better our short and long-term circumstances, there is a right way and a wrong way to go about it.

Thinking of the dumb ways to build wealth, these can include…

• Taking out loans or credit cards to boost our spending power.
• Burning ourselves out taking on extra work.
• Investing money without consideration of the risks involved.

The first item on that list was the dumbest of them all. A loan or a credit card does not give us free money – we have to pay it back or risk financial ruin! The other two items on the list can be turned around, provided we operate care and wisdom. If not… well, you don’t need us to tell you of the consequences.

So, rather than operating like a dumbass, be smart in your decisions.

Here are the smarter ways to build your wealth.

1. Start saving money now

Putting money aside each month is a guaranteed way to better your future. Whether you drop change into a money jar or set up a savings account with your bank, you will have extra money to spend down the line. Now, we aren’t talking about an emergency fund – that’s next on this list. Rather, we are talking about money you don’t touch – an amount that accumulates over the years. Particularly when it comes to your bank, provided you have shopped around different savings accounts, you will also gather a decent rate of interest on your savings.

2. Create an emergency fund

The emergency fund is there for one purpose only. To bail you out of a financial jam. If your car breaks down; if your house needs repairs; if your kids need a new pair of shoes… big or small, your emergency fund will give you the funds you need. What does this mean for your future wealth? Easy, you won’t have to dip into the savings you are building up for your future to bail yourself out.

3. Stop buying crap

Sorry to be so blunt, but you probably get our point. If you are forever spending money on items you don’t need, you will have less to spend on the ‘better things’ in your future. Seriously, how many pairs of shoes/chocolate bars/takeaways/useless knick-knacks do you actually need? Answer: you don’t need any of them (unless your shoes are in ruin), as they can be categorised as frivolous spending. You have genuine needs – and admittedly this can sometimes be a pair of shoes – so stop your ‘spend now worry later’ mentality. You will be in a stronger financial position in the future if you do.

4. Invest in your education

There are plenty of ways to invest your money, but education is certainly the most practical. A college course will improve your employability, and that can lead to a greater source of income. Picking up a few books on money matters is also a good idea, as you can get a better handle on your finances. Looking for investment advice is also useful – if you are going to invest in stocks and shares, real-estate, gold, peer lending, bitcoin, or whatever – investment opportunities where wealth can be made – you should find out all you can before you take the plunge. Otherwise, you are the dumbass we so cruelly classified you as earlier. More in the next point.

5. Reduce the risk of investment opportunities

Assuming you have educated yourself beforehand, you could look for investment opportunities to build your wealth. However, you need to understand the risks involved. You are effectively gambling your money in markets where prices can fluctuate, so you need to take care. Hiring an investment advisor is always your best bet (sorry for the pun), as they will give you any advice you need before you put any money down. There are other ways to minimise risks. If you’re thinking about trading, for example, we recommend you consider the demo tools offered by CMC Markets, which will give you a broader understanding of what’s involved before you start laying down actual cash. If you’re considering real-estate, look to invest in good locations, and remember the benefits of insurance. Diversify your investments too, giving you a greater chance of financial success – if one avenue doesn’t pay out, you may still increase your chances of wealth elsewhere.

Fortune favours the brave, or so the saying goes, but it also favours the smart. Use our advice as groundwork for your thinking, and then seek specific financial help – investment bankers, money advice services, financial planners etc. – to further increase your chances of wealth in the future. We wish you every success!