What is the most simple formula that anyone can follow to become wealthy?
Most millionaires followed the same formula to become wealthy. They lived below their means, saved consistently, invested those savings, and gave them time to grow. Saving is a powerful tool to become wealthy because by putting money away each month, you ensure that you’ve got cash on hand to invest in opportunities when they arise.
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The Most Simple Formula To Become Wealthy | Saving and Investment | Wealth Entrepreneurial Inspirational Talk
Why is saving and investing guarantee wealth in the long term?
Saving is investing, and investing is earning a return on your money. It’s sensible to invest money to earn a return on your money. This is another way of saying that money saved and invested will grow faster than money spent. Say you can put your money in an investment that will earn 8% interest or more. Spending your money on things like cars, vacations, houses, clothing, etc, will not generate returns and appreciate in value unless you bought them under your company business. The difference in these two returns is called the “real” rate of return, and if you consistently earn a better real rate of return than the cost of living, you should become wealthier as time goes on.