Recently I got asked, “What are some frugal ideas you would suggest to someone to build wealth?”. This was a hard question for me as there are many things I would suggest. Yet I decided to name the three that I believe had the biggest impact on my wealth. I have personally been able to increase my wealth by 400% since 2015 with these hacks.
You might be asking yourself right now “How did you do it” or “I’m sure you make a high income”. Well, let me tell you I make about $50K a year. So, if you consider that a high income I guess I do. I don’t consider myself a high-income earner. Over the last few years, I figured out a few shortcuts or hacks I like to call it to build wealth.
Hopefully, these will help you in your journey or you can mold them to fit your life. My goal is to help others build wealth and create the life they desire.
The three hacks
- Buy cars for $10K and drive them for 10 years.
- You don’t need to buy stuff to fill a void.
- Don’t upgrade anything if the item still works.
Buy Cars For $10K And Drive Them For 10 Years
I know there are people screaming right now that this is impossible or you can’t find a “safe” car for that price. This could not be further from the truth. There are now plenty of used vehicles out there in this range that are very reliable, and safe. I would suggest Honda, Toyota, Scion or Nissan as my go to. This is easily one of the biggest wealth killers I see on a daily basis. You probably do as well. Notice the coworker who earns the same as you yet drive a lavish BMW. Americans spend a crazy amount on their vehicles and it’s more than they need to. The average auto loan is now $30,032 with a payment of $503. The average term for an auto loan is 68 months. That’s over five years of paying $503 a month. That is a lot of money you could be using to build wealth. What’s worst is the majority of these people will not keep these cars. They simply upgrade to the next money pit.
Ten years sounds like a long time. Well, it very well could be depending on how you look at it. Yet if you take good care of your vehicle you probably can get ten years of life out of it maybe more maybe a little less. I currently drive a 2006 Scion XB. I bought this vehicle seven years ago for $8K. I plan to drive it for at least another 5 years unless something happens.
You Don’t Need To Buy Stuff To Fill A Void
Majority of people buy stuff they don’t need to impress people they don’t like. I have also realized people buy stuff to try to make themselves happy. Because they are unhappy with their lives, careers, income, and many other things, they seek out ways to fill that void and distract themselves. They buy stuff and it seems to work, they are happy. Yet the catch is it wears off and this effect does not last. Which in turn creates a cycle of buying stuff you don’t need to try to buy happiness. I have talked before about simple ways to break this cycle. Figure out what makes you happy in life. Figure out your priorities and spend all your time and resources on that and you will be happy.
Don’t Upgrade Anything If The Items Still Works
Too often people upgrade items not because they need to but because they get bored. Or they “must have the newest model”. I can’t believe how many times I have seen people ask for others to donate money to them and yet just bought the newest Samsung Galaxy phone. You would be surprised at how long items last if you simply take care of them. I just replaced my TV after about 8 years it finally broke. Yet instead of buying the newest 60” TV, I bought a 42” TV for $320. It’s insane how much more money you can save by simply replacing things only when they break.
These three hacks have helped me build wealth faster than most on my income. I know it might not fit everyone’s life perfectly. Yet I’m sure you can take this and make it work for you. I am incredibly happy every day of my life. Because I understand what my priorities are and continue to spend time on them. I don’t spend money on stuff to impress others. I save money so I can create the life I want and quit working in my 40s. I rarely ever buy things now as I have everything I could ever need. These items above have had a huge impact on my life in terms of building my wealth and me enjoying my life more.