How To Accumulate Assets: A Guide For Dummies

Accumulating assets is the path to wealth. But how can you achieve that? What’s the secret? 

Well, it turns out there isn’t one. Yes, it can take a long time to build wealth. But once you get that flywheel going, there’s nothing stopping it. 

Here’s what to do: 

Treat Saving Like A Game

Saving money can feel like a chore. After all, there’s a lot of work involved in making it, the last thing you want is to be unable to spend it. 

That’s why it is so essential to treat saving like a game. If you can turn it into a side project, it can completely transform how you approach it and deal with life. 

Most people start by trying to save between 10 and 20% of their income. Then, if they can, they increase the proportion of money they tuck away. 50% is usually the maximum, but some frugal people who live alone may be able to go even higher than this short term. 

Learn What Assets Are

Next, you’ll want to learn what “assets” are. You’d be surprised by how few people understand them. 

Assets are essentially anything that has the potential to make you more money over time. They include things like real estate, stocks, bonds, and loans made to people who can pay them back. 

Assets are not things like luxury cars or smartphones. While these consumer products might feel like investments, they are not assets in the traditional sense. 

Spend Less Than You Earn

Tied to the point above, you also want to spend less than you earn to accumulate assets. Getting this equation right can be extremely profitable long-term, especially if you can keep it up over a period of, say, a decade. 

When you spend less than you earn, you automatically accumulate savings. You don’t even have to think about it. Money begins to accumulate in your account, begging you to spend it in some way. 

Get Your Money Mindset Right

You should also focus on your money mindset. You want to avoid negative views that might hold you back. 

Many people get it stuck in their heads that they will “never be rich” or that they “will always be poor.” These often come from their unconscious minds. 

These thoughts aren’t benign. People who believe they will always have empty wallets usually do. That’s because they self-sabotage, working against their best interest and the behaviors that will enable them to accumulate wealth. 

Therefore, focus on how you think about your money. Start re-imagining yourself as a wealthy or affluent individual with a game plan to make it happen. 

Obtain Assets Without First Saving

Another tactic is to find ways to obtain assets without having to save first. This way, you can start earning returns immediately. 

The best way to do this is to borrow against a property. Use a DSCR loan calculator to see how much lenders will lend to you and then use this to calculate your margins and profit. 

What’s great about these loans is that you don’t need a down payment. The loan company only considers the income potential of the real estate, giving you the freedom to buy what you want. 

Adding two or three of these properties to your portfolio can get you off to a good start. Then, all you have to do is earn a regular living and wait for the assets to appreciate. 

Make More Money

You also want to focus on ways to make more money. If you can bring in extra cash at the end of the month, then you will accumulate assets faster, regardless of your investment strategy. 

The best way to earn more money is to fully invest in your current work. Can you get more hours or a promotion? 

If that doesn’t work, you can look for a side gig. These can sometimes blow up into something much bigger than you ever imagined, as long as you get the approach right. 

If that doesn’t work, you could also sell old stuff or even launch a business of your own online at a low cost. Setting up a company is stressful, but it has the potential to provide you with financial independence in a way a job never could. 

Avoid Bad Debt

Finally, don’t get into bad debt if you want to accumulate assets. Don’t buy things on credit cards or personal loans and then pay 20% interest. These payments are enormous and can hold you back financially in so many ways.