A Millionaire doesn’t usually get to their success overnight. It takes the right mindset, goals, and drive to make and keep wealth. Jaspreet Singh, a self-made millionaire and the face behind his brand The Minority Mindset, let us in on his secret to making his money and keeping it: a tried and true 5 step process to building wealth. Read on to find out how you can follow the right path to make the most of your hard-earned money.
Jaspreet uses the acronym CLIMB to outline his process for:
- Creating a financial base
- Leading your money
- Interest free living
- Multiply income, and
- Be great
This climb to wealth, if you will, is the secret to Jaspreet’s success as the CEO of Market Briefs and Market Insiders. He’s willing to share it with all of us, and breaks it down below:
- Create a financial base
This part of Jaspreet’s process involves, in his words, laying a good foundation for your money. Before you can make money, invest, or grow your wealth and protect it, you’ll need this step. Many on their way to a quick dollar will skip this step, and it truly makes the difference between the good and the great. Jaspreet gives us some practical steps for us to follow as we lay this good foundation:
- Save up $2,000 quickly
Jaspreet says that if you don’t already have this money saved up, you’re in danger. This is an emergency fund that will protect your wealth from disappearing in an unforeseen circumstance.
- Pay off major debts
Financial expert Dave Ramsey has coined the snowball method, which Jaspreet also recommends as a way to pay your lowest balance and highest interest first, then move on to higher balances and lower interest as you go. According to Jaspreet, anything at or above 5% or 6% should be prioritized here.
These two steps should be followed before you begin to really invest or build up your money. Think of this like losing weight before you build muscle – it’s making way for huge gains later. Since the rate at which your investments might grow probably couldn’t keep up with your high interest debt, you’ll have to eliminate this debt and save up an emergency fund before moving on to step number 2, leading your money.
- Lead your money
Typically, we make money, get taxes, spend, and have no more left. But Jaspreet tells us that the true American isn’t reached by living paycheck to paycheck. He says that instead, you should “pay yourself” and then spend whatever’s left. A more practical way of looking at this method can be found in the 75-15-10 rule. This rule involves using 75% of your paycheck on expenses, 15% on investments, and 10% on saving. Jaspreet even recommends setting up a few separate accounts to separate these different goals for your money.
Jaspreet says that the key here is that you won’t get rich by saving or spending (the 75% and 10%) – it’s by investing that you’ll truly make your wealth. Since inflation rates are rising quickly, just saving or spending your money won’t let you succeed. Obviously, you’ll have to keep paying your bills and meeting expense deadlines, and saving can protect you from a financial emergency. But, the key to this step in the process is to prioritize investing.
Maybe you’ve already completed this step in the process and you’re wondering, “should I save up more?” Jaspreet recommends that investors don’t save up more than 12 months of earnings (somewhere between 3 and 12 months depending on your circumstances). After you’ve done this, then move over the income you were contributing to savings to investing (25 percent now goes towards your investments each paycheck).
- Interest free living
This step in the process involves learning how to spend your money.
“Just because you can buy something doesn’t mean you can afford it,” Jaspreet warns. The point to this step is to stop financing things that won’t pay you back. Instead of buying a handbag that you think will up your social status, invest in the company that made the bag, and this will pay you back in real money, not just clout.
Another tip here that could make a huge difference for us is to live below your means. Jaspreet points out that people always want to make more money, but, when they start making this additional money, their expenses go up and they begin to live within higher means. This can prevent many from actually building their wealth.
For this concept, it’s helpful to understand and follow Jaspreet’s rule of 5 – if you can’t buy 5 of something, you can’t afford to buy 1. Jaspreet points out that the ability to buy something isn’t the same as the ability to afford something.
- Multiply income
Now, the fun part begins. If you’ve been interested in building wealth, the first three steps might have seemed arbitrary to you, but they are so essential to getting to this fourth step.
This is the point in time when you can begin to make more money, and make it truly work for you. Jaspreet recommends taking some time to know yourself and know what your strengths are in order to capitalize upon them and make more income, to ultimately invest and build wealth.
Some options Jaspreet recommends include: start a side hustle, earn more money from your job (get a promotion), or get another job that pays more. A great side hustle that Jaspreet has found to be incredibly lucrative is real estate investing. This can provide passive income to the investor, and truly help multiply your money with little maintenance.
After you’ve built a great foundation, now it’s time to figure out how to multiply the greatness you’ve worked so hard for.
- Be great
Now that you’ve built up your money, Jaspreet says it’s essential to know how to protect your money. This part in the process typically involves protecting yourself with insurance.
As a wealthy person, you should have business insurance, health insurance, life insurance, car insurance, and home insurance. This might seem like alot, but it will truly protect your current and future wealth.
This is where building wealth becomes a generational process; it can leave a legacy or it can be stolen through petty lawsuits, depending on something as seemingly menial as your insurance.
Another note that Jaspreet makes for the investor during this step in the process is to find out what you can do for your community – as someone with resources at this point in the process, you can be a huge asset for the community by giving back.
Rome wasn’t built in a day. Wealth isn’t built overnight. Take it from Jaspreet, an extremely successful entrepreneur and millionaire. His success took work, planning, and the right mindset. With his tips to build your own wealth, you’re on a great path to building your own financial security and freedom.
