Dear Happy Investor, this article is about getting rich for beginners. And it is necessary too because unfortunately, beginners who want to become rich make many mistakes. I know this by experience, as I made the same mistakes. As a beginner, you will first have to immerse yourself in the material about becoming rich. Learn from others, to avoid making mistakes. So if you are reading this article because you want to become rich, then you are on the right track!
Even as a beginner, you can become rich, as long as you know how and avoid common mistakes. This article is about 6 common mistakes that prevent you from becoming rich. Take these learnings and accelerate your road to financial independence!
These are the 6 common mistakes people make that prevent them from becoming rich:
- Getting Rich for Beginners: vision and belief
- Beginner’s mistake in Becoming Rich: not setting a financial goal
- Spending money on non-value-added products
- Too high fixed costs will make you less likely to get rich as a beginner
- Getting Rich for Beginners: working for your money instead of letting money work for you
- Getting Rich for Beginners: start with low-risk investments
Let’s take a closer look at these mistakes, and see how we can learn from them to become wealthy ourselves as a beginner. Hint: points 1 to 4 are necessary too, but thanks to points 5 and 6 you will become really rich (if you do it right 😉 ).
1. Getting Rich for Beginners: vision and belief
Everything starts with an idea. A thought that something is possible. People are capable of immense achievements. Underlying every great achievement is an idea. The same is true for beginners who want to become rich. Unfortunately, I hear too often that becoming rich is not for them.
However, since when do you accept this illusion? Where does the idea come from that financial wealth is not for you? Nonsense. Pure nonsense. Because becoming wealthy is possible for everyone, as long as you believe in it and are willing to go all out to achieve it. This belief that you too can achieve it, is the beginning of an extraordinary life with more financial freedom.
Vision and visualizing the vision
As you start reading more of my articles, you will gain more and more faith that you too can become richer. You will need to turn this belief into a vision. I have this for myself as well. For example, I visualize my vision daily, “seeing” how I achieve my goals. This is not a higher power or superstition; visualizing your goals really helps you achieve them. This has been scientifically proven. But what is your vision? Why do you want to become rich? Is it to never have to work again, or do you want to get richer so you can do more fun things with family and friends? Whatever it is, it’s your right. All I ask of you is to think about this carefully: What is it that you want to achieve? What is your vision around wealth?
I’m going to give you a personal tip though around wealth. You can do whatever you want with it. But the tip is to see wealth not as an end, but as a means to something else. Too often we see people becoming millionaires at the expense of everything, unfortunately including their family and social relationships. But isn’t it that you want to become rich in order to be happier? I can guarantee you that you won’t become happier with 100 million in your bank, but no one around you to enjoy it (except maybe “friends” who get horny about your money instead of caring about you). So longitudinal research shows that people with close social relationships are the happiest and live the longest. This is how I see it myself. My personal path to financial freedom is to have more free time that I can spend with my family and friends.
2. Beginner’s mistake in Becoming Rich: not setting a financial goal
It’s not enough to just turn an idea into a vision and belief. The next step is to turn this mindset (idea + belief + vision) into action. We do this by starting with a financial goal. After all, if you want to become rich you will also have to be goal-oriented to achieve it. Again: keep in mind that becoming rich is not the goal in itself, but a means to a happier life. Personally, I think your goal of becoming rich should not come at the expense of close social relationships. But it’s up to you what choices you make. Anyway, if you want to become rich as a beginner you will need to have a financial goal.
After all, without a goal, you have no direction. You don’t know where to go, nor do you know what to do to achieve it. Therefore, the question is to convert your definition of wealth into a concrete financial goal. To do this, use the SMART methodology, meaning Specific, Measurable, Actual, Realistic, and Time-bound. An example of a financial goal is: “within 10 years I want to work thirty hours a week, with a net income of 3000 euros that is supplemented by 2000 euros of passive income from my investments”.
If you want to delve more into how to set good goals, you can read my extensive article about the goal-setting roadmap. Where you can achieve all your goals in 9 steps. This is not only useful for beginners who want to become rich, but you can also apply it to your work. Goal-oriented people are more successful.
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3. Spending money on non-value-added products
When you have the vision and belief, as well as the financial goal, it’s time to get rich as a beginner. Let’s start with the easy part, which is spending less money. Saving money is not an art in itself, it is more a matter of self-discipline. Keeping your emotions in check, and ignoring social pressure. My best tip for spending less money is to stop spending money on non-value-adding products. Now of course value is very subjective. So decide for yourself what is or isn’t valuable to you. But I am going to challenge you by asking you to look critically at yourself. So with every purchase, you can ask yourself the question “do I really need this?”, or the question “does it really add something to my life?”.
As a beginner, you can get rich quicker when you maintain self-discipline over your spending
Using two common examples, I can give you a good take on what I mean. We’ll start with the car. Getting rich for beginners starts with the big items, which definitely include the car. A car is one of the biggest bad expenditures you can make. I do understand that you can’t escape it because often you need a car for transportation to work. But why buy an expensive $20,000 car? What does that really add? Is it to reward yourself? Is it because your neighbor or your friends also have nice cars? And if you want a luxury car so badly, buy used. Because if you really want to throw money away buy a new car. So never do that 😉 . The best decision you can make is by saving money on cars.
Another example I like to use is by using my sister as an example (yes, really). She has years of debt with my parents to pay off her car (…). But she just keeps buying expensive branded products and specially branded clothes. Why pay 150 euros for a T-shirt, when you can do it for 100, 50 or even 20 euros? Not that you have to look like a bum, but if you want a brand you just know that you are paying 50% extra purely for the name. And the only reason to buy a brand is because of a certain self-image you have. Be critical of yourself! By the way, my sister can’t appreciate this comment very much.
4. Too high fixed costs will make you less likely to get rich as a beginner
As indicated above, the easy part is to spend less money. Start with that right away. Next, it’s time to cut back on your fixed expenses. Because too high a fixed cost is a crucial factor for beginners who don’t get rich but want to become so. A common mistake is that when you start earning more, you also start spending more. We have already had the example of the expensive car. An expensive car also means higher fixed costs, such as car insurance. But one of the best examples of too high fixed costs is buying an overpriced house.
You see it happening everywhere. Maybe to yourself, too. People get jobs and make some promotions. Then they have a nice income, and they decide to buy an expensive house. By expensive, I mean really above 400,000 euros. This is especially disastrous for first-time buyers. When you both get a job, you really start making money. But yes, everyone wants to live large and beautiful. Because look at me be successful in my big (and especially expensive) house. Before you know it you have a mortgage of 2000 euros. This is now a typical example of how you can NOT structurally generate more income! Because imagine if your mortgage was only 750 euros. What would you do with that 1250 euros extra per month? I hope you’re not thinking of spending money now! In points 5 and 6, I’ll explain what you can do better with all that money, to become rich as a beginner.
Finally, a quick word about subscriptions. There is a real trend in subscriptions. Think about energy, mobile & internet, and so on. As a consumer, you have more bargaining power than you think, so you can save money on subscriptions.
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5. Getting Rich for Beginners: working for your money instead of letting money work for you
When you start spending less money and also start saving on your fixed expenses to spend even less money, you are on the right track. But the “problem” with saving money is that you can only save up to a certain point. After all, you have certain basic needs such as shelter, food, and occasional fun and relaxation is also important. So saving money in itself is not the way to get rich, but it is an important requirement for beginners. No, as a beginner, you become rich by making money work for you instead of the other way around.
The principle behind making money work for you to become rich is crucial to understand. You can read about this step by step in my book on making more money in less time. The bottom line is that when you work for money, you always get money for time. If you don’t work, you don’t get money. Simple, but annoying. And so we need to move away from that and look for ways of making money that allows income to come in independently of time. So whether you are sleeping, eating or working, money is always coming in. Now you can achieve this through really good ideas for passive income, or by making your money work for you. (PS: read my articles or search for “make money” or “passive income” to read all about it).
One of my best tips for making money work for you
One of my best tips for investing money is in real estate funds and stocks (tip 6). For example, I personally have very positive experiences investing in real estate funds. By the way, I also invest in stocks, but that requires more knowledge and risk. But this article is about getting rich for beginners, so my best tip is a real estate fund. Because with a good real estate fund you don’t run much risk, while you do get a high return. I personally find SynVest one of the better funds to invest in, which you can read all about in my review about SynVest. For example, I get an average return of around 8% from it. This is in contrast to the very low interest rates and inflation, which are making many people poorer.
Yes, you read that right. Those who put money in their savings account become a little poorer every year. Because today the interest rate is about 0.1%. If inflation (whereby your purchasing power decreases) is 2%, you actually become 1.9% poorer. Because you can buy 1.9% less with the money in your savings account.
Or what about P2P Lending? I invest part of my assets through Mintos. The advantage is that you can get a relatively high return of 9%, while your money is liquid. With the click of a button, I have my money back. Of course, this is not without risk, but makes more sense to me than in the savings account. Mintos is the best choice because it is the largest international platform. The advantage is that you can spread the risk over 100+ loans depending on your deposit.
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6. Getting Rich for Beginners: start with low-risk investments
Once you get to the point where you understand that investing is the best path to financial wealth, you’re well on your way. In this case, there is one last common mistake in getting rich for beginners. Namely: taking too much risk with investing. As a beginner, you will first need to gain knowledge and skills. You don’t play against the chess champions when you just start playing chess, do you? The biggest mistake beginners make is that they don’t thoroughly familiarize themselves with investing. And that’s a shame because there are definitely low-risk investments. Especially for people who have a high-risk aversion, these types of low-risk investments are attractive. Click on the link opposite to go to my article about low-risk investments. These are excellent opportunities for those just starting out in investing.
The 3 Best Tips for Starting to Get Rich
The best tips for starting to get rich is basically a 3 step process. We can assure you that getting rich for beginners always works according to these 3 steps. It is not magic, neither is there a simple solution. There is no quick way to get rich. There is only the best way, namely:
1. Keep your fixed expenses as low as possible
2. Make as much money as possible
3. Invest all the money you can spare for return on investment
The best way to start getting rich is through successful investing. The more money you can invest, the faster you will become wealthy. And the sooner you start, the more return-on-return you realize for exponential wealth growth.
Example: person A starts investing at age 20 with 500 euros per month. Person B starts investing at age 30 with 1,000 euros per month. They both realize 8% average annual returns. After 30 years, person A has assets of €645,000. Person B has assets of €1,291,000 after 30 years.
But if person A, with her €500 monthly deposit, locks in not 30 years but 40 years (until she turns 60), her wealth grows from €645,000 to €1,407,000.
Conclusion: invest as much money as possible and hold it for as long as possible.
Below we give some tips for successful investing. In addition, we give tips for making more money. Of course, those who earn tons of money also get rich relatively quickly.
The best investments for getting rich
The higher the return with investing, the faster you get rich. However, achieving higher returns also means taking more risk. Advanced investors can afford this. With its knowledge and experience, they achieve higher than average returns. Think 15% or higher.
For beginners, however, this is not realistic. Becoming rich for beginners through investing therefore starts with a realistic starting point. This realistic starting point is a market average return. Any beginner can realize about 8% average return per year over a 30-40 year period. This means that you can be person A or B from the example above.
An 8% average return per year can be realized by investing in the market average. This can be done in a variety of ways. Perhaps most popular is the method of stock funds, also called Exchange Traded Funds (ETF).
A prime example is the investment platform eToro. Through this platform, we can buy Vanguard's low-risk ETFs. By combining these ETFs, one can aim for market-average returns.
- Vanguard Total World Bond ETF (BNWD)
- Vanguard Total World Stock ETF (VT)
- Vanguard Global ex-US Real Estate Index Fund (VNQI)
- Vanguard Real Estate Index Fund ETF (VNQ)
- Vanguard Commodity Strategy Fund (VCMDX)
The combination of these ETFs provides exposure in a variety of investment markets. The advantage of these ETFs is that they are inexpensive (low percentage fees) and offer a lot of diversification.
This is not the way to get high returns. But perhaps more sensible for getting rich for beginners, given limited knowledge to invest.
7 Side hustles for getting rich for beginners
In our option, the best start for getting rich is through investing. We have seen that the monthly deposit is important for how rich you can become in the long run. However, investing has risks of losing money. To reduce this risk, we should only invest with money we can afford to lose.
Investing is not the only way to start getting rich. Just as attractive, but tougher, is getting rich by making a lot of money.
In salaried employment, the can sop making a lot of money is not so great. You can make more money as a freelancer, but for this you have to be an expert in your field. However, the best option is to become an entrepreneur. By making money and people work for you, so you make a lot of money.
You don't become an entrepreneur overnight. And certainly not from a successful business. That's why it's smart to start small. Start with a side hustle. This is a side hustle in addition to your job.
These are 7 interesting side hustles for starting to get rich.
1. Invent a product or service
The best way for getting rich with lots of money is achieved through entrepreneurship. Invent a product or service that solves a pain. Ensure high quality, and maximum added value. Be specific in what the product or service adds. What pain does it take away? How does it make life easier? Is this product or service the only option? What are the alternatives?
Entrepreneurship makes you rich. In doing so, you do need knowledge of strategy. A good revenue model is a must. Scalable. High profit margin. Rapid expansion. Delve into the business. Think of a product or service that is really valuable. Then you need to market it. The fastest way is online sales. Building a website is easy. SEO and SEA can be outsourced. Make sure the profit margin remains attractive so that you generate sufficient cash flow. Listen carefully to the customer. What do they really want? What will they pay more for? Continue to continuously improve the product or service.
This mindset is what makes you a successful entrepreneur. This mindset is at the root of starting to get rich!
2. Start a YouTube channel
YouTube is one of the best ways to get rich for beginners. The main key is to start the channel and then use social media marketing to drive traffic to it.
Start by creating high-quality content that people want to watch. This means thinking about what types of videos are popular on YouTube and making sure the content is engaging and informative. For this, you need to be knowledgeable about the subject matter.
Second, make sure you promote the channel and get as many views as possible. The more views, the greater the chance of making money through advertisements or sponsorships. So don't forget to monetize the channel by signing up for Google AdSense or partnering with a company like Patreon. Google Adsense shows ads during the videos and there is a great opportunity for income for every viewer who clicks on the ad. However, you will earn the biggest amounts through collaborations with companies.
3. Be an influencer or affiliate marketer
In recent years, social media has taken the world by storm. And with it, a new breed of Internet celebrities: the influencer. These are people with huge followings on platforms like YouTube, Instagram and Snapchat. They often have millions of fans and can make a pretty penny on the side by promoting products or brands they love.
Here are a few tips for getting started:
- Find a niche. Specializing in a particular topic has its advantages.
- Start by creating a variety of content such as photos, videos and even blog posts. Choose the type that is most appropriate for the business and cross-promote other brands or companies.
- It is helpful to take a digital marketing course to understand the ins and outs of content. Knowing what type of content and which social media platform resonates most with the audience is necessary to become a successful influencer. It's a great way to get rich for beginners only by focusing on marketing and cross-pollination.
4. Develop and sell online courses or ebooks
Nowadays, there are many ways to make money online. One popular method is to develop and sell online courses or ebooks. This can be a great way to generate income because you can reach a wide audience with your product.
To be successful in this venture, it is important to create high-quality content that people are willing to pay for. The course or ebook must be well researched and provide value to the reader. It is also important to market the product effectively so that potential customers know about it and can make a purchase.
If you put in the work, developing and selling online courses or ebooks can be a great way to generate income. With some effort, you can create a product that people find valuable and are willing to pay for.
Alternatively, with translated versions of e-books/courses in English, the author or teacher can expand his market to the U.S. and other countries in Europe, if not worldwide.
5. App development
When it comes to generating revenue, app development can be a powerful tool. By creating and selling apps, developers can not only make money, but also reach a wide audience with their product.
There are a few different ways to generate revenue through app development. The most common is by charging for downloads, either on a one-time basis or through an ongoing subscription.
Another popular option is in-app purchases, which allow users to purchase virtual goods or unlock additional features within the app. Finally, many developers choose to display advertising in their apps; this can be through banner ads, video ads, et cetera.
Which revenue model is right for your app depends on a number of factors, including your target audience and the type of app you are creating. However, with careful planning and execution, app development can be a lucrative way to generate revenue.
6. Offer consulting services
Consulting services are based on providing expertise to help companies in various industries achieve their goals. Whether you provide strategic planning services or help companies implement new technologies, your knowledge and skills can be very valuable to businesses. By looking at consulting companies, you may be able to find a relevant consulting job.
Becoming a consultant can be a great way to earn a good income. Many consultants even earn a six-figure income. Consulting can be a lucrative business, so it takes more than just knowledge of a particular field. Other important skills include the ability to market yourself and your services, build a client base and manage time and money effectively.
7. Investing in cryptocurrency
Over the past decade, cryptocurrency has become a global phenomenon. With the rise of Bitcoin and other digital currencies, more and more people are looking to invest in this new asset class. There are many different ways to invest in cryptocurrency, but one of the most popular is through initial coin offerings (ICOs).
An ICO is a fundraising event in which a new cryptocurrency project sells a portion of its tokens to early investors in exchange for cash. The process is similar to an IPO in the traditional stock market. However, ICOs have become a controversial topic because of the lack of regulation and scams that have taken place.
Despite the risks, many people are still interested in investing in ICOs because it can prove to be a useful method for beginners to get rich with little money. If done right, investing in an ICO can lead to incredible returns.
However, the chances of this happening are very small. Very likely, you will lose all your money. Investing in crypto can be interesting in relation to getting rich for beginners because you can make exponential returns with small amounts. But unfortunately, the probability of losing is so high that it is not the best option.
A better option is to invest in various assets. This is a smart move for any individual or company. By diversifying his portfolio, he can protect himself from financial ruin if the stock market crashes.
There are many different types of assets to choose from, and each has its own benefits and risks. Some of the most popular assets are stocks, bonds, real estate and precious metals.
Each type of asset has different tax implications, so it is important to consult a financial advisor before making any decisions. With careful planning and research, investing in assets can be a great way to secure one's financial future.
Note: Never invest with borrowed money. A mini-loan or personal loan costs money and commits you to repayment. If your investment is (temporarily) in the red, you will not be able to repay the loan amount. The consequences will be very undesirable!
Conclusion on Getting Rich for Beginners
In this article, I have named 6 common mistakes beginners make when they want to get rich. For each mistake, you have read how you can avoid it and what you can do instead. If you summarize the six mistakes, you can conclude that becoming rich for beginners goes wrong with a (1) lack of direction (vision, belief, goal), a (2) lack of self-discipline (saving too little, spending too much money) and a (3) lack of knowledge (not investing, or investing too riskily). If you want to learn more about how to make the right investments though, don’t miss this article on money investing!
In our opinion, the best tip for getting rich for beginners is to go through the 3 steps. Namely (1) keep fixed costs low, (2) make a lot of money and (3) invest everything you can spare at market average returns. Anything you do better within these steps will make you richer.
Don't focus on cutting back. Focus on making as much money as possible. Do something you love, and become super good at it. Learn to think and act like and entrepreneur. Add value, and charge a fair price for it.
Make money work for you now. Getting rich for beginners is easy when you start investing as early as possible. Don't do crazy things. Diversify your portfolio for low-risk with market-average returns. This is wise for beginners. And yes, of course it can yield additional returns when you invest more advanced.
These are our best tips on getting rich for beginners. Do you agree? What are your tips and experiences? Let us know in the comments below.