5 Stages of Growing Wealth – Which One Are You?

I have been doing lots of reading lately about the habits of growing wealth. There is definitely a journey to becoming wealthy and it seems like many of these people who manage to grow significant wealth have the same habits. It’s so interesting!

 

In fact, there are only 5 real stages to growing wealth. Once you move onto the next stage, you are on a better path to creating that wealth.

 

So, what are they?

 

1. Negative net worth.

The first stage in growing wealth is starting right at the bottom. In this case, you have a negative net worth. So your overall debt is more than your assets. Things like credit cards, loans and a mortgage mean that your overall debt is higher than anything you currently own. The good news about this stage is that the only way is up! If you’re not sure how to work out your net worth, this post will help.

 

If you find that you are struggling with your debt, then there are some posts you could read first; these will give you the information plus additional websites to use if you are struggling to start:

• So You’re In Debt? What To Do Next. 
• How To Start To Pay Off Debt.

 

2. Net worth of zero.

So you’ve made that significant step and reached a net worth of zero. Congratulations! Your debts now equal your assets, so you are finally on a better footing.

 

3. Net worth positive by £1.

This might seem like a very small step for stage 3 of building wealth but it’s important. Your net worth is finally in the positive. It doesn’t matter how small that number! It can take people a long time to reach this stage so well done for that.

 

4. Growing your net worth.

Now you are in the stage of growing wealth where your assets are growing and your debts are reducing. The bigger then gap, the better you are! This stage can seem slow to begin with but keep going; compound interest and time are your biggest friend when it comes to growing your wealth.

 

5. Multiple income streams.

So now your financial footing is secure and you are building it’s now time to think about not relying on one income stream. Once your debt repayments are under control it’s time to increase that income whilst keeping your expenses low.

 

You might want to do things such as:

• start a YouTube channel
• invest in dividend paying stocks and funds
• become a Virtual Assistant and work from home

There are so many things you could do to make multiple income streams; both passive and active. Have a look at this video about passive income ideas to start with £100.

 

If this type of thing interested you, then I would recommend the following reading:

• I Will Teach You To Be Rich
• The Millionaire Next Door
• The Psychology Of Money

 

So there you have it! The 5 stages of growing wealth, starting right from the bottom. Which stage are you? 

 

 

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