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Want to Be Rich? Having These 3 Things Makes It Easier

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Recent billion-dollar lottery jackpots have millions of Americans dreaming of a life of wealth and luxury. But the odds of picking the winning ticket are pretty slim.

Most of us will have to build our wealth a little more slowly, but several things can help us on our way. Here are three factors that could help you increase your net worth over time.

1. A high income

A high income opens a lot of doors. It enables you to pay your monthly bills and have extra money left over for long-term goals. When most people think of large incomes, they tend to envision people employed in high-paying careers, but that’s just one way to bring in more money each month.

It’s also possible to grow your wealth by starting one or more side hustles in addition to your regular job. Sometimes, it’s even possible for side hustles to develop into businesses on their own.

If side hustles aren’t your thing, you could consider asking for a raise or looking for a better-paying position elsewhere. Every dollar you’re able to bring into your household, whether through side hustles or traditional employment, helps you get one step closer to your goals.

2. A budget that prioritizes savings

Big-ticket purchases, vacations, and retirement all require substantial personal savings. A high salary can help you get the money you need, but you also need a budget that allocates a portion of your income to your goals. Otherwise, it’s easy to overspend.

First and foremost, you should build an emergency fund if you don’t already have one. This protects you if you encounter unexpected bills, like an emergency room visit or an insurance deductible. Ideally, you’d like to have at least three months of living expenses on hand. Some people prefer to save six or more months of expenses.

Beyond that, a lot depends on your goals. If you hope to leave the workforce someday, you’ll want to earmark some savings for retirement. And you may also hope to buy a home or a car or take a big vacation. Estimate how much each of these things will cost and then decide how much you can put toward each one every month.

If you’re struggling to save enough, you may have to rethink your timeline for some of your purchases. Or you could try to cut back spending. For example, you might try using coupons or a cash back app to reduce your costs while grocery shopping. Then, you can put what you save toward your long-term goals.

3. A decent credit score

Pretty much everyone needs to borrow money at some point in their lives, and a good credit score makes this a lot more affordable. Creditors typically offer borrowers with higher scores lower interest rates because they feel more confident that these borrowers will keep up with their payments.

Every creditor has their own rules regarding what sort of credit score they’ll accept. But generally, a score of 670 or higher is considered good.

Building a good credit score requires you to demonstrate that you can repay borrowed money in a timely fashion. If you don’t have a credit card already, you may want to get one. Making regular payments on a card is one of the best ways to build a good credit history. Limiting your spending to 30% or less of your credit limit is also helpful as long as you are still charging a little to the card each month.

But ultimately, it’s consistency that will make the biggest difference to your credit score. Credit scoring models are designed to change slowly so they provide a long-term look at your credit behavior. So don’t expect your score to change a ton after a month or two of on-time payments.

Even with the above things, it can take some time to amass significant wealth. Don’t let that discourage you, though. Celebrate your progress and reward yourself for small wins, like saving $100 or $1,000 for a long-term goal. Over time, all these small actions can add up to substantial wealth.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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