A financial coach who's worked with hundreds of clients says 3 things helped her build her own wealthOctober 28, 2020
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- A financial coach who teaches people how to use money says that investing was a key way she built her own wealth.
- Another key was learning the difference between when to spend and save, especially on purchases that are more 'wants' than 'needs.'
- She learned to value and prioritize purchases that can help her grow wealth above buying things that lose value with time.
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Building wealth isn't easy, and for most people, it takes time.
But for some, having a few good habits can help accelerate the process. Financial coach and author Tomeka Lynch Purcell has taught hundreds of people how to spend, save, and invest, but before that, she went on her own wealth-building journey.
There are three habits that she developed along the way, and she now includes them in her books and tries to instill them in her financial-coaching clients.
1. Investing isn't optional
Lynch Purcell says that investing has been critical to growing her wealth. And, since investing is a key way to grow money over time, it's become something she actually enjoys.
She says she's just as excited to buy a stock or a share as any material item. "Never in a million years did I ever think stocks and their increases would make me giddy, but they do," she says.
"I spend money to build my net worth. The increasing revenues of investments can help change your mindset about money," she says. "Seeing your dollar increase from $1,000 to $10,000 over time builds your confidence to continue to invest."
2. It's OK to spend on 'wants' from time to time, but focus on 'needs'
While treating yourself to something you want every once and a while is necessary, Lynch Purcell says that people have to know their limits. "I am told often that I am frugal, but I like to always see where my money is spent," she says.
"I limit my spending to necessity only, and [buy] something I want, not need, once in a while," says Lynch Purcell.
3. De-prioritize spending on depreciating assets
Lynch Purcell says she limits the number of purchases she makes that lose value over time.
While things like homes can gain value over time, things like cars often lose value. "Never can you obtain a return on your investment making a purchase of no value," she says.
On her own financial journey, she's tried to avoid spending more than necessary on these things. "Depreciating assets are major mistakes in trying to grow your dollar," she says. While they're sometimes impossible to avoid, it's about minimizing damage and making growing assets a priority.
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