Money Skills That Can Make a Huge Difference to Your Net Worth

There’s no doubt that the vast majority of ultra high wealth individuals inherited their money. Or were perhaps part of an high-growth, high-tech, start-up situation so unusual that there’s little likelihood of any of us following in their footsteps.

There are however a simple set of skills that any of us can develop that will take us from low net worth to high net worth over the course of a lifetime. If that’s your perfectly reasonable goal, focus on learning how to do the following exceptionally well.

Budgeting

Knowing — and controlling — where your money goes is the first step to financial security and freedom. There are various ways to budget and you may want to experiment with what works for you. The important thing is to learn the basics and apply them, starting right now.

Budgeting is probably the simplest skill to learn, though not necessarily the easiest to implement, and the one you should start with, especially if you have debt to pay off before you can feel stable and start to invest.

It has the added benefit that you can start right now, regardless of your financial situation. You don’t need a lot of money or time to learn to budget, you just need some kind of income to work with.

Investing

Investing is a more complicated skill, but it’s very possible to start simple and then slowly learn more about the more complex and risky types of investment. Your options — from super simple to more complicated — include things like:

• Bank products such as interest bearing accounts
• Employee pension and savings schemes
• CDs
• Bonds
• Index funds
• ETFs
• Stocks
• Real estate
• Options and futures
• Forex
• Cryptocurrency and other digital assets
• Hedge funds, private equity, and other alternative investments

If you have no idea what any of these actually entail, then you have a lot of learning to look forward to. Take it one small step at a time and make sure you fully understand each option.

You’ll want to seek out professional help before making any significant moves, but you’ll also want to understand the basics before finding a financial professional. Otherwise you’ll have no idea what the options they’re suggesting are and will have to waste big chunks of time in explanations.

Environment Design

This is another simple topic to learn about in order to avoid the scenarios that make you over-spend, spend impulsively, or spend on unneeded extras. Environmental design simply refers to designing your surroundings and lifestyle to make it easier for you to meet your goals.

If healthy eating is your goal, for example, you’d keep sugary snacks out of the house and avoid fast food joints. If saving money is your goal you might:

• Automate savings and investments
• Put longer-term savings in accounts that aren’t easy access
• Improve and automate home energy settings so you don’t have to think about them
• Leave your credit card at home most of the time
• Use a round-up app
• Avoid retail settings during leisure time
• Avoid the people in your life that you always overspend with
• Unsubscribe from marketing emails
• Use an ad blocker on all your devices
• Create a vision board of everything you’re saving for

Negotiation

This one is vital. Good negotiations skills can help you get a raise, enter a new job on a higher salary, secure higher rates if you’re a freelancer or consultant, buy property (and other big-ticket items) cheaper, and secure loans at a better interest rate.

Many people don’t think about the importance of good negotiation skills until they’re needed, by which point it’s often too late. Learn them in advance so when you’re on the spot — anywhere from a job interview to a car showroom — you already know the basics of how to walk away with a favorable deal.

There’s no need to devote huge chunks of time to learning these skills. Just one hour, once or twice a week, spent learning money skills can compound fast and start having an impact quickly. And you don’t have to do anything too drastic either. That hour could be listening to a money podcast, watching a video or reading a book. You could even listen while driving or or watch while exercising.

About the Author

Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks and the occasional award winning short story. Her work has appeared in a range of publications both online and off, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine. Learn More About Karen