Ramit Sethi Shares 3 Tips for Becoming Rich on an Average Salary
When you read all the financial advice about building wealth and getting rich, it can feel like it’s out of reach for the average person, but that couldn’t be further from the truth. According to the experts, anyone can get rich if they take the right steps.
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Ramit Sethi, the self-made millionaire and host of “How to Get Rich” on Netflix, has three top tips for getting rich on an average salary. So, how can you do it? Here’s what Sethi suggests.
Begin Investing
The most important step to getting rich and building wealth is to think outside your savings account and start investing your money. Sethi has always been a proponent of investing in a simple S&P 500 index fund instead of trying to find some secret investment that needs an advanced degree just to negotiate. The goal is to invest whatever you can to build the habit and to have compound interest on your side.
Sethi once said he believes in saving 10% and investing 20%. He said you should strive to increase the amount you’re investing by 1% every year. The trick is to invest your money automatically, so you don’t rely on willpower. You don’t have to see the money leave your bank account when you automatically invest your funds. The most important step is to invest continuously at all income levels.
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Negotiate a Better Salary
“Learn the skills of negotiating your salary and getting paid what you’re worth,” Sethi advised. Your full-time job should compensate you according to the value you bring to the company.
If you have an average salary now, it doesn’t mean you’re stuck. Once you’ve built the habit of investing your money consistently, the next step is to find a way to increase your income, so you have more to invest.
The best way to increase your income is to find a way to get paid more at work. You can try to speak with human resources about increasing your salary or search for a similar role in a different company.
At this stage, it’s essential that you do your research and look for information about what other people are making in similar positions. You can reach out to recruiters to find information about salary ranges, so you know what to aim for. You should strive to constantly increase your salary, so your pay doesn’t stay at the same level for years.
Start a Side Hustle
Sethi’s final step in getting rich on an average salary is finding a side hustle that will bring in some additional funds. As you’re investing your money and working on increasing your salary, it’s crucial that you look for other options for making more money. A side hustle can help you reach your investment goals more quickly, and it could provide the resources to treat yourself as well.
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