The No. 1 Way to Grow Your Wealth, According to a Self-Made Millionaire: It's ‘Deceptively Simple'
Wealth building is not as hard as you might think.
self-made millionaire
Author of "
I will teach you to be rich
" Ramit Sethi.
Sethi, who has spent the last 20 years of his writing career on money and psychology knows how to grow your wealth. The No. CNBC Make It: "The No.
The top 10 ways to improve your life
Grow your Wealth
"They are so simple, they're almost deceptive," he said. "They may seem dull, but these are the ones that work."
Sethi says that if you follow these three simple steps, "you'll have a significant amount of money on the long-term."
Increase your investment amount gradually
Sethi says that investing is the first and most important way to increase your wealth. "Invest a certain percentage of your annual income and then increase it by 1% every year."
Investing in an index with low costs is fun.
Like the S&P 500
Sethi claims that if you invest in, your money will grow as fast as the "secret investments" of the wealthy.
He says: "We believe rich people are able to make huge amounts of money because they have secret investments." "Listen, i have access to these investments and i can tell you that they do not typically perform better than an S&P Index Fund."
Howard Silverblatt is a senior index analyst at S&P Dow Jones Indices. He says that the S&P index has performed well in history. Between January 1926 and December 2023, it posted an annualized return of 10.34%.
Sethi states that "the ordinary truth is you can get excellent returns with a low-cost, long-term index funds."
You deserve to be paid what you are worth
Sethi advises: "Learn how to negotiate a fair wage after you have learned to invest money.
negotiating your salary
"Getting paid what you are worth"
Even though companies may be still exist, they are not necessarily incorporated.
Inflating public salaries ranges
Negotiating for the highest possible salary is essential. Pay experts recommend that the top end of the range be between 40% and 60% higher than the minimum. The average salary range for job listings is 28%.
Bloomberg reports
.
Research is important
Sethi says that it is important to seek out information on what other people in similar jobs are earning.
You can negotiate your salary when it comes time to do so.
Ask recruiters who are in the know
The salary ranges of their candidates. Online databases may not have the most up-to date and personalized information.
Madelyn Machado is a reverse recruiter from Tampa. She says that when you are offered a salary figure, add $20,000.
CNBC Make It
She added, "Don't accept your first offer."
- Pursue a side hustle
Sethi says that pursuing a part-time job is the third step in growing wealth. If you want to boost your income, start a side business.
As you
get started
Anuj Nayar, LendingClub's financial health officer, suggests that you think about your goals, the time you can commit and what you would like to achieve.
CNBC has previously reported on this.
This will help you to find the perfect side hustle.
Consider these options:
Rent out your house this summer
Renting on Airbnb or another rental platform;
Pet Sit Through Rover
Take up a position as an
A content assistant
; or
Apply to become a Notary Public
.
Why don't more people do the steps?
Sethi claims that these three steps are simple and achievable. These are steps that people don't take.
You know why people don’t do that? We are told that we must have 30 screens, with all the PE ratios displayed on each screen. And we must pick stocks. "We are taught that investing is gambling," Sethi says. "None is true."
Sethi says that investing is not a form or entertainment, like gambling. He adds that managing and investing finances are routine tasks. Sethi spends 'less than an hour per month' on his finances.
Real investing is boring. He says it's just like watching paint dry. He says that people talk about investment like it is entertainment: "I have to go to GameStop and do this." "You want entertainment? "Get a dog. Want to be entertained? "Watch my Netflix show."
Don't miss: Do you want to be more successful in your work, life and finances?
Subscribe to our newsletter now!
CNBC is free to download
Warren Buffett's Guide to Investing
The guidebook distills the No. This guidebook combines the best advice for regular investors with do's and dont's as well as three key investment principles.