Here Are My Top 5 Tips for Building Wealth

There’s no shortage of flashy “get rich quick” advice online, but real wealth is built slowly, with smart decisions and long-term strategy. Garrett Z. Sutton, a Rich Dad Advisor and founder of the Tenero financial education YouTube channel, has spent over two decades helping Americans grow their wealth the right way.

Find Out: Suze Orman’s Top Tip for Building Wealth Is a ‘Very Easy One’

“As Rich Dad’s 25-year legal architect of asset protection and trusted advisor to Robert Kiyosaki since 2001, I’ve been fortunate to speak on stage around the world to small businesses, entrepreneurs, real estate investors and investors about financial education topics,” he said.

Here, Sutton shared with GOBankingRates some of the best tried-and-true wealth-building tips he has given over the years.

Spending money beyond essentials comes at a cost. The difference between your earnings and expenses is your opportunity money — the funds you can use to save, invest and buy productive assets. If you can rein in spending, you can reign over an improved financial future.

Learn More: 4 Secrets of the Truly Wealthy, According To Dave Ramsey

Understanding how credit scores affect your financial future is paramount. Interest rates, loan and leasing approvals, and more are tied to your credit score, which is a reflection of your financial responsibility.

Paying bills on time and keeping credit balances low leads to a higher score, which leads to lower interest rates and thus lower costs.

Banks don’t care if you got an A in Algebra. They want to see an A on your credit score.

Compound interest is earning interest upon interest. A savings account pays interest on your money. That interest, left in the account, also earns interest in the future. Over time, this little strategy can lead to large, compounded savings. Albert Einstein called compound interest “the eighth wonder of the world.”

Taxes are almost everyone’s largest expense, but the tax code is full of incentives — open to every taxpayer — to do things that the government needs help with, like providing rental housing.

At the start, you should understand the basics of taxation, like the deductions and credits you can legally take to lower your taxes. As you progress, be attentive and aware of the significant incentives the tax code offers to all investors.

Many of us want to own our own home, car, boat, dirt bike and other assets — but none of those put money in your pocket. Instead, there is a cost to their ownership, including taxes, gas and maintenance.

At the other end of ownership are income-producing assets, such as stocks that pay dividends and rental properties that generate income. These are assets that you want to accumulate along the way because someday, you are going to retire. Your income-producing assets will keep working even though you don’t.

Here Are My Top 5 Tips for Building Wealth

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