5 Basic Principles for Growing Wealth

One of the goals many of us have is to grow our wealth over time. In many cases, it’s more about the financial security and the ability to live a comfortable lifestyle, than it is about racking a huge net worth. Regardless of your goal, adherence to these 5 basic principles can take you a long way if you want to grow your wealth over time.

Principles for Growing Wealth

growing wealth

1. Live Within Your Means

This is the most basic of basic financial principles. It comes up over and over again. However, it bears repeating. You can’t grow your wealth if you’re constantly overspending. The ability to grow wealth depends on having assets rather than liabilities, and when you live beyond your means, all you end up with are liabilities.

Take the time to get your finances on track by paying down debt and earning more than you spend. Free up some of your financial resources for use in your efforts to build wealth.

2. Take Calculated Risks

It’s much harder to build wealth when you don’t take some risks. I’m not talking about trying to pick a winning stock and using a great deal of margin to try and make it big in one fell swoop. That’s more of a fool’s risk than it is a calculated risk.

Instead, I’m talking about the type of calculated risks involved in boring long-term investing. Consider index funds and ETFs, and if you do decide to invest in individual stocks, look for value stocks.

Without taking some risk with your portfolio, you will be unlikely to earn the sort of interest that results in long-term wealth. The yield you get on your perfectly safe savings account won’t be enough to build your wealth over time. Take a risk or two if you want to see solid progress as you build wealth.

3. Spend Smart

You don’t have to be a penny pincher in order to build wealth over time. It’s possible to spend a little extra sometimes, and enjoy life. The trick is to spend smart. When you make purchases, make sure that you are getting true value. You don’t want to overpay, but at the same time it makes sense to get something of good quality so you only have to buy it once. Also, spend money on proper maintenance so that things don’t end up in worse shape down the road. Judicious spending is part of growing your wealth.

Additionally, only spend money on things that are important to you. Figure out your spending priorities and stick to them. If you don’t have a purpose for it, or if it isn’t enriching your life, don’t spend money on it.

4. Invest in Yourself

You are your own best asset. As a result, you should be striving to improve yourself. One of the things that sets the financially successful apart is that they look to be educated, rather than entertained all the time. This education doesn’t have to be the formal kind that ends in a degree, either.

Think about how you can improve your skills so that you are more marketable and so that you can qualify for that raise or promotion. Learn the basics of business and start a side hustle. Even just learning more about how money works can be a helpful way to increase your knowledge and make the most of your financial resources to help you build wealth.

5. Give Back

Many financial experts point out that giving is part of a well-rounded financial life. Many of those who are wealthy make it a point to give to charity, and to give in other ways. For those who believe that blessings come from giving, this is just one way to be rewarded for generosity.

Even if you don’t believe you will be blessed for giving, there’s something about a giving attitude that can help make your life richer in general. Plus, if you make giving a priority, you are more likely to manage your finances carefully so that you have enough to accomplish all of your goals.

Bottom Line

The foundation for growing wealth is a fairly simple one, but it’s not always easy to carry out your efforts. However, with a little planning, and by really thinking about your situation, it is possible to build wealth by sticking with a few simple ideas.

Photo by Alan Cleaver.


By , on Feb 4, 2014
Miranda Marquit Miranda is a professional personal finance journalist. She is a contributor for several personal finance web sites. Her work has been mentioned in and linked to from, USA Today, The Huffington Post, The San Francisco Chronicle, The New York Times, The Wall Street Journal, and other publications. She also has her own personal finance blog: Planting Money Seeds.


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  1. This is a great starting list. For those who are new to money management, it can be super helpful to see the basics laid out like this. Thanks for producing this!

  2. Good basic list. I have found that many people do not know how to take the correct risk in the market, using low-cost index funds, as you point out. The risk averse use CDs and perhaps savings bonds. The risk at all costs buy individual stocks and try to time the market. Neither of these strategies will do as good over the long term as low-cost passive index funds.

  3. At last someone who says “Earn more than you spend” rather than “Spend Less than you earn”. They are not the same thing. “Spend Less” is restrictive and keeps you focused on your present circumstances. “Earn More” is expansive and gets you focused on finding solutions. So thank you for putting the best case forward

    Point 4 “Invest in Yourself” was first taught to me by a multi-millionaire and it is invaluable advice. However, he stated it slightly differently. He said “Only Invest where you have most control over the results which is in Yourself first and then in your sphere of influence next. If you don’t, you’re hoping that someone else has your best intersts at heart above their own. And why should they when you can’t be bothered to be involved yourself?” That advice has saved me from so many bad investments and kept me focused on what interests me

  4. Excellent point about taking calculated risks. Doing your research always pays off in the long term in my opinion.

  5. I think you hit the major personal finance themes here succinctly. I especially appreciate you mentioning giving as the final point.

  6. dojo:

    I don’t think as further as to grow wealth, but I do think that following these tips will ensure that at least you are becoming/remaining debt free and are financially stable. This for me is already a good result, although you can indeed get even better outcome from all this.

  7. Great points, specially the 4th point of investing in yourself because majority of people stop investing once they start doing job or business which is the big mistake and one should keep oneself updated as learning of human being stops only when one dies.

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