If you are interested in building a stable fortune, then pay close attention to the habits of wealthy people. Many young people imagine wealth to be fast cars and expensive yachts.  However, like a flash in the pan, this type of wealth does not last.  True wealth is the ability to retire early and live comfortably, without any financial worries.

A recent survey by the Phoenix Companies, demonstrated that all wealthy people shared a common attribute: living below their earnings. This may seem like an obvious trait, but to be able to retire wealthy, an individual must spend less money than they earn, leaving money to save and invest into productive assets.  Here are five easy steps to get you on the road to retire wealthy; but you have to start today.

Five strategies to retire wealthy

Set and keep your eye on the goal:  Setting a financial goal or set of goals is the first step. A goal, such as a better home, gives you a visual target to direct your energies. After a realistic goal is set, reasonable steps can be taken to get there. If you want a house, set your sights on a “starter house”, as realtors love to refer to a less expensive house. You can always re-tune your goal after you get that first house and strive to upgrade. You need successes to keep you on the road to wealth. 

Prepare a plan: Ok, you have set a realistic goal, now how do you achieve it? Prepare a monetary and lifestyle adjustment plan, starting with a budget. Oh no, you say budgets mean you can’t do anything fun anymore. Wrong, budgets let you get a handle on your spending and fill those money leaks in your life that drain your bank account. Before you can build a fortune, you must learn to manage your cash flows. Cash flow involves the money coming in, initially from a paycheck, and the cash going out, bills and expenses. It is crucial to always know where you money is going each month.  Just like any successful company would plan and account for its income and expenses, an individual must plan and manage their money as well.    Many people fritter money away each day - $5 on a magazine, another $12 on lunch, and perhaps $10 extra on desert.  The small amounts of money that are wasted on trivial items add up quickly.  To be able to retire wealthy, a person needs to keep track of each dollar that is spent. Then, money the leaks will stand out and beg to be mended.

Seek ways to minimize needless spending: Yes, there will be some sacrifices on the road to wealth, but that should not surprise you. If it were easy, everyone would do it. Challenge yourself to be successful, assume you will succeed and you will succeed. Remember the little train that could? He thought he could, he thought he could and he did. Achieving wealth includes knowing when to pull the financial strings tighter. For example, some people may stop off at an expensive coffee shop each morning, spending $25 or more a week on coffee. By making your cup of coffee at home or learning to appreciate the office brew, you will find that over the course of a year, you can easily save more than a thousand dollars.  This much money is saved by cutting just one expense – imagine how many more thousands you could put away in savings or investments by cutting out other unnecessary costs in your life. 

Reduce your debt ASAP: A person cannot accumulate wealth until they learn to manage debt. Start amassing your fortune today by wiping the slate clean. Many wealthy people have an easy mantra, “If I can’t pay cash for it, I can’t afford it.” Credit cards and auto loans bury more families who can’t distinguish between want and need. As you begin to eliminate your debt, don’t spend the newly available cash, invest it!

Invest intelligently:  Contrary to popular belief, any working person can become wealthy; however, you must start early to begin amassing your fortune.  Simply putting $400 each month into a compounded savings account will amass you nearly half a million by the time you retire.  How many times have we seen the person with a modest life, contribute large sums of money to worthy causes?

In addition, there are various other ways that any person can invest intelligently.  Take advantage of your company’s retirement plan (401k) if there is one. A 401k is an easy way to save a large sum of money for retirement. Your contribution is pre-tax which means the deduction is made before income taxes are computed on your paycheck. Most companies will match a portion of the amount that you contribute to the plan. That is free money and dramatically increases the earnings yield of your 401k account. Get into the habit of “paying yourself first” by automatically making that contribution.

If your company does not offer a 401k, then consider opening an Individual Retirement Account (IRA).  An IRA deposits a percentage of your income into a separate savings account. As long as the money is in the account, you do not have to pay income tax on it. An IRA can be invested in the form of stocks, a bank account, mutual funds, and bonds.

Becoming wealthy does not necessarily take hedge funds and exorbitant salaries.  In fact, every single working person can retire wealthy through five easy strategies that can be incorporated into any budget.  However, in order to retire wealthy you have to start today. Remember there is no time like the present.