Can I get really rich?

Get rich - the 10-point plan for success

Valeria Nickel, August 4th, 2020

The dream of becoming a millionaire is probably the most frequently dreamed dream ever. Since childhood, most have wanted financial freedom and carefree. Having a lot of money is a sign of luck, success, influence and makes you attractive and desirable. So it's no wonder that hardly anyone would really object to getting really rich.

In Germany, the number of millionaires is currently estimated at 1.46 million. In 1978 there were 217,000 and in 1960 only 14,000. So this goal seems achievable for more and more people. Luck in the lottery or a great legacy are not the only ways. Because there are only a few hundred lottery winners each year and only around 20% of millionaires owe their wealth to their parents or deceased spouse. Answering the question "How do I get rich?" is still not that easy and cannot be answered with certainty. However, there are certain requirements that you must have Self-made millionaire can do.

How do you get rich? The 10-point plan at a glance:

  1. Make a plan.
  2. Be disciplined.
  3. Educate yourself.
  4. Note the compound interest effect.
  5. Build different streams of income.
  6. Reconsider your risk tolerance.
  7. Act on your own and take personal responsibility for your assets.
  8. Be patient.
  9. Note: Debt can (but does not have to) be intelligent!
  10. Work on yourself and your attitude.

1 | plan

First of all, one should say goodbye to the fallacy circulating on the Internet that one can get rich “just like that” without doing anything about it. Wealth comes through hard work. To do this, you should not only have heard the word “asset accumulation” before, but ideally have already dealt with it in more depth.

Additionally, there are these other golden wealth-building rules to keep in mind in order to build a foundation.

2 | discipline

In order to not “only” build up wealth, but to really gain wealth, it is essential to continuously improve your own savings rate. This is the amount that you put aside on a regular basis. First of all, you can get one Savings plan or standing order set up to discipline yourself - because good resolutions alone usually don't help. It is good to automate saving and investing so that at the beginning of the month your money immediately and automatically goes to different savings plans and accounts. This is how you get used to getting by with a little less and “paying yourself first”. The amount doesn't even have to be high at the beginning.

After that, it's about increasing the savings rate. On the one hand, this can be done by reducing your expenses as much as possible. On the other hand, you can then start increasing your own income. However, many people start taking care of their finances much too late. In order to get rich, you should start early to build up your wealth in a disciplined manner so that you can then let the time work for you. It is also important to keep checking your own successes. This also requires a certain discipline.

3 | Knowledge

Rich people are not financially illiterate. Therefore, improve your financial literacy at every opportunity: read financial books and blogs, keep track of the news. It is also a fact that you don't have to be more intelligent than average to get rich. This was also recently expressed by Warren Buffett, who is one of the richest people in the world today. Our tip: Acquire more and more financial knowledge!

An investment in knowledge still pays the best interest.

Benjamin Franklin

4 | Compound interest effect

Compound interest is one of the most helpful tools for getting rich: when interest income is reinvested, the amount originally invested increases. A higher amount is then accrued in each new period. Assets (and debts, on the other hand) grow exponentially when interest payments are reinvested. In short, you always make bigger ones Profits that in turn generate profits. You should understand and take advantage of this process. The compound interest effect is a powerful mechanism and should not be underestimated. If you want to benefit from the effect, all you have to do is re-invest the profits from your investments.

5 | Different streams of income

Having multiple streams of income is a huge benefit. On the one hand, of course, because this is often associated with higher income streams, on the other hand, because you are Protected against the risk of complete failure are. Passive income is particularly advantageous. It doesn't matter how much time you put into it. This means that you can create a long-lasting stream of income with a one-time job. The classic example is a book: First, a lot of work is required to write it. After that, however, little further care is required and the income stream flows by itself. Another example is investing in so-called index funds (ETF). With a manageable risk, passive cash flows can also be generated here. Crowdinvesting in real estate also offers the opportunity to generate passive cash flows and get rich with real estate.

Here you can find the investment opportunities

6 | Willingness to take risks

Often the richest people in the world include those who are commonly referred to as "speculators": hedge fund greats George Soros and Ray Dalio or the legendary investor Carl Icahn, for example. You made a lot of money with money. They each had ample start-up capital. Basically, however, it does not matter whether you start with € 100,000 or € 10,000 - whoever invests money consistently and yourself Do not shy away from price fluctuations can build a small fortune. The German share index, for example, has brought an average return of 8% per year over the past few decades. It is therefore worthwhile to invest your money in stocks and the like - if you are willing to accept price fluctuations and take a risk.

There are two of them Ways To Make Money From Stocks. On the one hand, you can try to buy the shares as cheaply as possible and wait for prices to rise in order to then sell the shares at a profit. On the other hand, you can take advantage of the dividend, which is the distribution of profits from the company from which you bought the shares.

You can find bargains especially if you invest in employee shares at discounted prices. In most cases it is worth investing just because of the discount.

It is practically the opposite of investing in stocks Home. It offers security, but your capital is tied up for a very long time and you have no way of using it to build up wealth in any other way. If you still want to get rich with real estate, you should focus on higher returns and with real estate crowd investing. Many investors come together via an Internet platform in order to be able to invest large amounts together. In this way, they reach the thresholds of the high-yielding asset classes that were previously only available to professional investors. Find out about current investment opportunities in this area. For all risk taking, be sure to diversify your investments. You should also set up an emergency account with three to six net salaries.

7 | individual responsibility

If you want to become a millionaire, you have to be able to take responsibility for your money. It is therefore best to take care of your finances yourself. Because financial advisors are often only concerned with their own benefit, especially if they are dependent on a particular bank. The contracts they broker are often bad and expensive. If you lack knowledge, find one Fee advisor. This costs money, but advises independently and is paid by the hour and not per successful conclusion of a contract. This ensures that you really get good advice and the best deal. It is also helpful to contact people who have already made it. In contrast to their bank advisor, who is usually not rich himself, a wealthy person often knows very well how to get rich.

8 | patience

Often you don't just want rich, you want get rich quick become. However, wealth growth, knowledge building and experience take time. And everyone who doesn't win their money by playing the lottery or high-risk financial products with high start-up capital needs these prerequisites. So think long term when investing money. You will reach your goal with patience. Impatience, on the other hand, can cost a lot of money and nerves.

9 | Smart Debt?

At first glance, getting rich and getting into debt do not go together. In fact, you should also be careful not to spend more than you earn - see point 2. However, not all debts are necessarily bad. After all, you can borrow 3% money, for example, but earn a 10% return. In this case it is "Good" debtthat help build wealth. Nonetheless, you should be very careful about the type of debt and risk you are taking. When buying shares, for example, it does not make sense to take out a loan because the markets are very volatile and the shares do not generate any monthly income to pay off the loan. Real estate experts, on the other hand, often use loans to get rich with real estate. Because here there is a monthly cash flow in the form of rent that serves the loan. However, landlords do not only benefit from the rental income from a property. Houses and apartments are also worthwhile due to their increase in value and can be sold at a later date for a profit. Despite loans, it takes a certain amount of equity to get rich with real estate.

10 | Psycho trick

Don't worry, at the end of the day there is no unreasonable advice on how to get rich with your imagination alone or with hypnosis, for example. The point is that rich people often get by certain behavior patterns, skills and social structures distinguish. Work on yourself and develop the special personality that enables you to build wealth. In particular are a pronounced willingness to communicate, Ambition and a “hands on mentality” are important. You can already take precautions during training: An elite university helps, especially in view of the many contacts with former fellow students who can still be useful in later professional life. In addition, a good education gives you self-confidence and confident dealing with customers or business partners. As you can see, there are many things that can pave the way to wealth.

Image Copyright: elwynn / Shutterstock.com

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