How to Get Rich Minus the Gimmicks

Who wants to get rich quickly? If you’ve ever heard that question posed to you, chances are it caught your attention, and with good reason.

Seriously, who wouldn’t want to have that happen? But the idea of accumulating wealth in one fell swoop sounds more like luck of the draw, the state lottery or hitting a slot machine or roulette wheel out of nowhere.

Financially speaking, those who have been able to consider themselves well off or comfortable money wise have done so through saving, spending with a focus on needs with a few “wants” sprinkled in for posterity.

Those who are good with money simply amass savings, a nest egg and carry little or no debt, all the while saving for retirement are implementing smart money decision from one day to the next, and don’t focus on one simple rule of thumb but instead piece together financial wisdom, get some help along the way and aren’t adverse to budgeting or one simple word that separates foolish spending from that which you’d consider smart: “no.”

Unfortunately, those who are getting rich are the minority when you look at statistics of how much Americans have saved, both on an every day, one month to the next in a savings account along with retirement numbers that aren’t encouraging.

Roughly 69 percent of the population have less than $1,000 in a savings account.^[1]

That would suggest that any emergency that would occur, from braces to broken bones, roof leaks to oil leaks aren’t going to be able to be covered with your own funds, and thus would require additional debt as a result.

Retirement numbers aren’t much better, quite frankly, with more retirement accounts being held by those of retirement age, with only mild interest from the 32 to 37 year old range. The latter demo has about 51 percent of that age group participating in or staking claim to a retirement account, while 61 percent between the ages of 56 and 61 have one.^[2]

There are a few bullet points worth noting about those two sets of stats.

First, the 32 to 37 age group isn’t saving, even though that is the time when you should really be focusing on the last 30 years of your career to really maximize retirement. Perhaps just as startling is only 61 percent of the 56 to 61 age range has a retirement account.

Can someone explain why that’s not 90 percent?

It’s safe to assume that not very many people are getting rich, which would explain the lack of money saved now and for later, and the propensity of those who have nothing for retirement or less than $1,000 in a savings to hope for getting rich quickly, rather than making wholesale changes to how they save and view money overall.

And if you factor in the credit and debt the average person carries, the picture is bleak.

Credit card debt is on the rise in the United States, up 3 percent from 2017 to 2018, with an average amount of more than $6,700.^[3]

That number might not seem like much, but factoring in the $1,000 savings plateau and you have a recipe to only add to that number.

What’s the answer? Is all hope lost as far as being rich and in a good place financially since the masses aren’t really anywhere near that point?

Is really the only way to get rich quick is to continue spending money at casinos, on scratch off lottery tickets or hoping you hit a massive March Madness bracket next year?

The fact is as much as the numbers are betting against the general public, you still can avoid debt, gain wealth that you never thought possible and do it in a way that isn’t backed by a scheme, a wildly lavish and unrealistic “plan” or anything of that ilk.

Instead, roll up your sleeves, go in head first and dig into where you are financially and start thinking about changes on larger and smaller scales such as these:

Monthly mayhem: Review monthly expenses and cut them into ... three’s

Wait, so hold on a minute: you want monthly expenses cut? The answer is “yes.”

The truth is most people don’t have a budget in the truest sense, one you can find written down somewhere or kept on a spreadsheet.

Instead, you get a lot households that have a general idea what they spend and not a real sense of money going out the door from one month to the next.

Rather than fixate on a number or a dollar figure as far as how much you should spend each month, cut your budget into three parts, using the 50, 30, 20 rule of budgeting.

This states 50 percent of your budget should go to necessities or things that you need (housing, utilities, etc.), with 30 percent for wants, frivolous spending and another 20 percent toward saving money.^[4]

As far as budgeting goes, you don’t have any recipes or magic potions to put forth as far as being successful goes but rather taking stock of what you make, after taxes, and using the 50, 30, 20 rule or some sort of budgeting technique (simple math works, too) and making sure you’re not spending more than you make.

Consider that 60 percent of Americans spend all or more of what they make, leaving little room for saving money.^[5]

If you’re spending 60 percent and are part of that group (or worse) then you’re probably not putting aside money into a savings account and definitely aren’t implanting any sort of 50, 30, 20 rule of thumb.

If you’re asking “where” as far as what expenses to cut, consider those that aren’t needs, but masquerade as such.

Cable television, higher-end cell phone packages or memberships you don’t use come to mind.

The average cable bill is on the rise and has been for the last eight years, with an average of around $100, and that’s on the lower side.^[5]

Some cable television costs as much as $200 per month. Consider streaming services to cut that expense.

Price Shopping: If you want to get rich, pay what something is worth and no more

Are you a price shopper by nature?

If not, become one.

One way you can become better suited financially is to not accept price as a non-negotiable piece of business.

It starts with big-ticket items like homes and cars, but can be whittled down to furniture, cell phone plans, cable or satellite, insurance rates or just about any product, whether you opt to use any sort of negotiation tactic or simply go down the route of finding a better price and calling it out to retailer that is trying to gain your business.

A company, car lot, or any business in the market for customers, new and retaining what they have, are always int he market for clientele and often times will go beyond a sticker price of sorts and do what it can do earn your business.

The online marketplace really has given way to smaller entities that find ways to lower production or overhead costs to give you a comparable product, minus the price markup.

Some products are marked up to the point that you’ll pay double if you just accept the status quo.

A few higher mark-up items include anything printer ink to to popcorn and paying full price for jewelry.

Those who are adept at managing their finances would argue that they steer clear of those items, and also make it a point to shop around, and ultimately pit retailers against one another.

Take printer ink and popcorn, for example.

Printer ink often is double when you buy new cartridges versus finding ones that were refilled, and movie theater popcorn accounts for an astounding 40 percent of the profit a theater takes in due to the markup.^[6]

While buying popcorn or printer ink doesn’t seem like a big deal, if you can avoid these things at full price, even a few hundred dollars of year in your pocket means something as far as adding to a savings account or retiring comfortably.

A larger item, such as a car, has varying markups depending on what type you buy.

Even if you’re in position to buy a luxury car, prepare to spend 10 or 15 percent above market value, versus less than 5 percent for a more modest, albeit dependable, car.^[7]

Price matching makes sense, but the key to that is exercising that impulse not to buy on the spot or buying what you don’t need.

Buyer’s remorse: Buy what you need, not want looks new and shiny

If you’re in the market for a product, something you need, such as a car because yours isn’t worth fixing, then that means the potential buy makes perfect sense.

For most, we buy based on impulse, and we prefer new or replacing something we have that works just fine.

The former is called buyer’s remorse, simply buying what you don’t need and then regretting it after the fact. Replacing what you already have for something better or newer, even if what you have works and functions fine, plays into that remorse when you have a new bill, spend money you shouldn’t and eventually come to the realization that the “old” was just perfectly acceptable.

Most who are better with money than others use a 24 or 48 hour rule when they seem a product or want to partake in a service. This is quite simple: whenever you see something you like, opt to walk away and give yourself a day or two to think about it.

That rule is often overlooked, when you consider that 1 in every 5 people have admitted to spending $1,000 or more in an impulse buy.^[8]

How about for the entire year as it relates to impulse buying? Spending hits $450 per month, which equates to $5,400 and most of it (more than 70 percent) centers on food.^[9]

The food piece isn’t necessarily grocery store shopping but often is take-out dining or eating out at a restaurant, which can become pricey and often is the difference between having extra money and not.

Dining out isn’t something that the average person puts on their budget, for starters, and trending suggests that the average American spends more on takeout than actual groceries, suggesting convenience but also that you’re buying both.^[10]

Impulse buys aren’t just a new, shiny corvette or the latest and greatest smart phone, although those are equally avoidable. You also have to take into account impulse buys being defined as smaller purchases that are hardly inconsequential.

A common term you hear when talking about someone who has done well financially without the help of others or a backer, parent or relatively who bestowed financially independence on them is “self-made millionaire.” The “millionaire” part might not be in the cards per say, but the self-made part should mean something to you.

A lot of what ails most people is their love of spending and not wanting to really track what they’re doing as far as money goes.

You could argue that Americans stopped saving when wages stopped growing at a better pace. The average raise for an individuals across the board is approximately 3 percent, which is a flat change from 2017, but the real number is a net rise of 1 percent given the 2 percent inflation rate that 2018 brings to the table.^[11]

The same study suggests that 1 percent increase is actually down from last year’s number: 1.9 percent.

Those numbers, much like the aforementioned ones about how much we have saved in a nest egg, for retirement and the rising debt, would tell a story of workers not making enough to even be able to save.

While that has some merit, you also can’t overlook the number of people living paycheck to paycheck, thus living below their means.

A late 2017 study shows that about 80 percent of Americans live paycheck to paycheck, and that is telling.^[12]

Getting rich hardly is about luck, but rather understanding your means. Living from one check to the next suggests that, if nothing else, you re-evaluate your budget, determine if cuts can be made or savings gained just by a few minute overview of what you’re spending your money on at this very moment.

That simple act can turn the average household into one that is rife with opportunity to grow their wealth and do so over time while implanting better money habits that might not translate into riches right away but certainly means long-term financial prosperity and ultimately success.