Apart from luck, like winning the lottery, there are only five routes to getting rich:
1. Invent something ground breaking
In today's high-tech world, if you are not a scientist or engineer (by talent, not necessarily qualification) then this is unlikely to happen for you.
But even if you have a genuinely great idea, that no one else has spotted, the path to riches is still very long and difficult.
Nothing summarises the challenge with getting rich from an invention better than the film, Flash Of Genius.
Watch inventor Robert Kearns battle with the Automotove industry and ask yourself, "is this the route that is going to make me rich?"
2. Build a big business
Building a big business is probably just as hard as making millions from an invention.
In most cases you have to spot the rarest of things; a fast growing market, with low competition, and low cost of sale.
You have to be extremely focused on the business almost all of the time and know that your time isn't your own - you can't switch off on holiday like an employee because there may not be a business to come back to if you do.
A great book to read about the realities of building a business is Ray Kroc's Grinding It Out.
So let's look at the things anyone can do to get rich
If you do each of the three things consistently for the next few years, you can become well off, then a few more years and you too can be rich.
Remember, rich people fight for every penny and avoid over spending. They never waste money by over-paying on any bill.
3. Spend less - your first step is to get £2,000 in cash
Research shows the average UK household can cut its costs by £1,000 or more every year.
Follow five simple steps to easily cut your household bills.
Once your household bills are cut to what they should be, look at these areas of your spending:
- Eating out and takeaway - if you love it, then keep doing it, don't make yourself miserable for money. But set yourself a monthly budget.
- Coffee and lunches - if you buy lunch rather than make it you will be spending about £1,200 per year. People who make their lunch and take it to work save £800 per year.
- Clothes - set yourself a budget.
- Gadgets - you don't need them, they break and get out of date. These are strictly rewards for hitting a savings goal.
- Hobbies - if this is your passion then you must keep doing it. That's the point of getting richer.
- Holidays - Save for holidays - Cut the cost of holidays .
- Cars - No one ever needs to spend more than £5,000 on a car really. Anything over that is because you want to.
Cut my household bills
Set my personal budget
4. Earn more to get to £4,000 in cash
It's obvious that for you to be rich, you need to earn more - but don't look for a big sudden increase, looks for lots of small increases and look for them all the time.
Here are a load of ways anyone can earn more:
- Negotiate a pay rise - keep a list of good results you achieve at work. Book a review with your manager. Present the list and ask for a pay rise in line with jobs you have seen advertised (that pay more). You just have to be brave enough to ask most of the time.
- Change companies - if there are similar jobs being advertised that pay more, and your manager refuses the pay rise, apply for the other company's position.
- Retrain - use your evenings, weekends or holiday to take a "crash course" or gain a new qualification. But only retrain for jobs that pay more. Search our Job pages by salary for ideas.
- Start a second income - second income come in lots of different forms. Bake wedding cakes, do admin work from home, or joon Avon, or buy and sell or make and sell things on eBay (it could be anything - our readers have told us that they have got into things from making picture frames to selling imported meat thermometers!).
5. Save and invest to get to....
Once you have cut your bills and increased your income, you can start to save and invest.
This is where your life starts to change for the better.
If you cut your costs by just £167 per month, or £5.50 per day, that's £2,000 a year.
Increase your net income by the same then that's £4,000 you can save.
When you start saving you should put 2-3 months living expenses in the best cash savings account that you can find, so you earn interest, but can withdraw money without notice or penalty. This is strictly for genuine emergencies like a boiler or car breakdown.
...to get to £17,000
Next, you should invest that money in something low risk, but with better returns than a savings account.
A Stocks and Shares ISA or lifetime ISA are good places to start.
You can invest up to £4,000 each tax year in a lifetime ISA and the government will add a further 25%. So for every £4 you save, you get £1 extra - up to £1,000 per tax year.
But you can only draw it out without penalty to buy your first home or when you are 60 years of age.
However, if you invest in this for just three years, you will save £12,000 be given another £3,000 for free and could earn nearly £2,400 in interest/growth.
So you could end up with nearly £17,400! And it will keep growing even if you stop paying in.
Over 30 years you can earn more than £200,000 in interest and growth.
Keep Adding To Get To £2.1m!
Keep adding to it at the same rate, and investing it in sensible funds that return 9% growth on average and you will end up with £2.1 million pounds.
Invest in a second ISA to get to £4m
Once you have used your annual Lifetime allowance you should then look to invest in reasonably low risk finds via a Stocks and Shares investment ISA.
At first, investing in funds (via an ISA for the tax benefits) with good recent track records, is usually how new investors grow their wealth without taking on too much risk or making mistakes.
Find an IFA to set up a lifetime or investment ISA for me.
Set up an ISA myself.
A word about debt...
If you have small debts, then you should pay them off before you start to save or invest.
If you have big debts, and are struggling to cope, you should seek debt advice.