The Best Way to build wealth
Building wealth isn't complicated, but it requires discipline and time. Here are the most important steps:
- Start Saving Early
The earlier you start saving, the more time your money has to grow through compound interest. Even saving $100 per month starting at age 15 can grow to over $175,000 by age 45 with a 7% annual return.
- Open a High-Yield Savings Account
Keep your savings in an account that pays more interest. Banks like Ally or Marcus offer much higher rates than traditional banks. Learn more about Ally Bank
- Learn About Investing
Once you have some savings, learn about investing in low-cost index funds through platforms like Vanguard or Fidelity. The S&P 500 has historically returned about 10% annually on average. Vanguard's investing basics guide
- Avoid Debt
Stay away from unnecessary debt, especially high-interest credit cards. If you need to use a credit card, always pay the full balance each month.
- Develop Skills & Education
Invest in yourself by learning valuable skills. This could mean college, trade school, or learning to code through free resources like freeCodeCamp.
Sources:
- SEC Compound Interest Calculator
- NerdWallet's Best High-Yield Savings Accounts
- Investopedia's Guide for Young Investors