The person who initiated this Ask Me Anything session, a former employee of several billionaires, believes that ordinary people could also amass great wealth if they just lock in. No matter your financial situation, there are some money lessons that just about anyone can learn to increase their income, and who knows, maybe even become billionaires themselves.
Faron Daugs, a certified financial planner, wealth advisor, and founder and CEO of Harrison Wallace Financial Group, shared a few of them that benefit his wealthiest clients and could help the average person, too.
The first one is to avoid debt as much as possible. “If you want to build wealth, you cannot waste money on paying interest on consumer credit, such as credit cards and even car loans,” Daugs says. He advises paying off credit cards in full and on time every month to dodge high interest rates and keep a good credit score.
Next up, Daugs advises keeping bought cars for a long time. “If you need to finance the car, pay it off as soon as you can and plan to keep the car long after that loan is paid off,” Daugs says.
He also urges people to have an emergency fund consisting of three to six months of living expenses. This way, if any emergency happens, you don’t have to charge the expense onto a high-interest credit card or take out a personal loan. “This is one of the first steps someone should do in building a solid financial foundation,” Daugs says.
Once that is done, Daugs suggests investing, whether it's in stocks, bonds, or exchange-traded funds. As a general rule, people should save 20% of their salary to go toward their savings plans, emergency fund, retirement, and investments. “[You] can use those invested savings for future car purchases, vacations or other short- or long-term goals, without incurring additional debt,” Daugs says.
In addition, Daugs advises taking advantage of everything your employer has to offer and even utilizing various tax deductions. He also encourages people to live within their means and try to find other income streams.
“My self-made millionaires started by reducing their debts to increase cash flow and build their ‘rainy day fund,’” Daugs concluded. “Discipline is key and with it you can build the financial future you desire.”
