Some purchases, like buying designer clothing or making daily impulse purchases, don’t provide the lasting value needed to live a wealthy life. Rather than spending all your money on these purchases, the wise approach is to strive for three keys and carefully invest in the assets in each of them.
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What are the three keys to becoming rich? GOBankingRates spoke with David Edmisten, CFP, founder and principal advisor at Next Phase Financial Planning, about investing in a strong financial foundation, improving your personal value in the marketplace, and investing in your health.
A solid financial foundation
A solid financial foundation is the first key that those who want to become rich should strive for. Edmisten recommends purchasing a diversified mix of stocks and bonds for one’s financial assets.
Stocks, Edmisten said, are growth assets. They help increase wealth and outpace inflation over long periods of time. Purchasing bonds, as well as dividend-paying stocks, can also generate interest and dividend income. This creates cash flow to help provide retirement income.
The advantage of spending your money on stocks and bonds? It is easy to do. Edmisten recommends that most people consult a financial planner to invest in a way that fits their risk tolerance.
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Improving your self-worth in the workplace
There are several programs you can invest in right now that can help make you a valuable asset in the workplace. Edmisten recommends considering these options:
Taking these courses only helps you improve your skills, but it can help you increase your earning capacity. By spending money on these programs and using them to hone your existing skills and learn new ones, Edmisten said you will be able to increase your earned income. This leads to creating more wealth.
Invest in your health
We often overlook health as a necessary investment in ourselves. There are several purchases you can make that, if used daily, allow you to invest in your personal health and well-being. This goes beyond purchasing home gym equipment or signing up for exercise classes. Edmisten also recommends learning to cook, eat healthily, and engage in active hobbies.
Being rich, Edmisten said, doesn’t necessarily mean saving a specific amount. It means living a good life, and a key part of that is staying healthy.
Being healthy can help you live longer and enjoy a better quality of life, Edmisten said. It can also help reduce costly medical problems later in life, meaning there is a tangible financial benefit to being healthy. Fewer medical bills mean more money available to do what you love, and you’ll feel better too.
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This article was originally published on GOBankingRates.com: I’m a Financial Planner: Here Are 3 Things You Should Always Spend On If You Want to Be Rich
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