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Get Rich: 10 Money Habits of the Wealthy

wealthFollow these 10 simple money habits of the rich and you will automatically become wealthy.

Get rid of bad debt

This should be the first step to creating wealth. Good debt may be a mortgage on your own home or investment property, a student loan, or a business loan. Generally, everything else is bad debt and you need to eliminate it before embarking on any wealth building plan.

Prioritise your spending

Always look for ways to spend less. Stop all impulse buying, and only buy things you really need. You need to live life, so decide what is most important to you and by all means spend money on the things that give you a real sense of happiness, but don’t spend money on things that are trivial to you.

Pay cash for consumer goods

Yes, this includes your car. Save up until you can afford it. This is called delayed gratification. Never buy anything on hire purchase or with a personal loan. You will usually get a discount on the sticker price if you hand over the hard stuff.

Ditch the credit card

Most banks now offer debit cards, which you can use just like a credit card, except you are spending your own money, not going into debt or paying interest. (There is one instance where having a credit card can be beneficial – using it in conjunction with a revolving credit mortgage on your home to turbo-charge early repayment)

Buy a used car

One of the best ways to throw money away is to buy a brand new car. Many millionaires never buy a new car because they know how much it depreciates as soon as they drive it off the yard.

Pay yourself first

If you don’t have a mortgage on your own home, set up an automatic payment diverting at least 10% of your income into an investment vehicle. Doing this forces you to live on less than you earn, an essential element to wealth creation.

Pay less tax

Most people don’t realise how much tax they really pay (Hint: It’s more than just PAYE). You can get access to a myriad of legal tax deductions through having a home-based business or investment property.

Pay for your financial advice

That’s right – if you want truly independent advice, make sure you’re the one paying for their services, not a third party finance company with juicy commissions. Getting independent Wealth Coaching advice is a great starting point. And remember, your bank manager is not your friend, and certainly not your financial advisor.

Get financially educated

Make it a habit to read about money and investing on a regular basis. The more knowledge you have, the better your financial decisions will be.

Pay off your home mortgage as quickly as possible

If you have a loan on your own property, pay off the debt as soon as you can. Put every spare cent into reducing your principal. This is one of the most effective ways to grow rich, if you know how. Once you are mortgage-free, you can divert the funds you were using for your mortgage payments into investments instead.

What do you think? Let me know in the comments below.

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