For our final episode of 2020, we are giving you a list of 8 steps to build wealth in 2021. Take out some pen, paper, and a willingness to reflect and plan! Read on to get our 8 steps and a glossary of helpful Yo Quiero Dinero blogposts to get you started on your 2021 dinero journey.
Episode 65 provides you with 8 steps to build wealth in 2021. 2020 has been…a sh*it show, to say the least. But here we are, on the last day of the year. We made it. So take a moment right now to honor that. YOU did that.
Many of us have a ritual at the end of each year: we reflect on our year, feel a certain type of way about it, and then try to set goals for the new year. This year more than any other year got us thinking about our dinero. So if you’re setting dinero goals, make sure they are not rooted in financial anxiety, but rather a goal to thrive. As you set your goals, reference the below steps for some guidance on how to make these clear, effective goals.
In Episode 65, I lay out my 8 steps to build wealth in 2021:
Reflect on your past budgeting habits, explore new budgeting styles, and find what works best for you. If you’ve tried budgeting before but had little success, try a new style! Set that budget. Achieve those goals.
2. Practice value-based spending
FI/RE culture can sometimes seem like it is all about frugality.
Anyone who knows me knows I cannot be about that life. I am on track to reach FI/RE, and I am not frugal. I enjoy spending money on the things I like and prioritize. When we are clear about what spending doesn’t make us feel guilty, we can prioritize that over other forms of non-essential spending that, in the end, we feel guilty about. No more guilt attached to your dinero!
3. Pay off high interest debt
We’re talking debt above 8%. That debt that feels like you just keep paying interest, not even the principal amount. Make a plan to pay some (if not all) of it off, depending on your income situation. Because when you’re building wealth, your gains won’t make a big difference if they are less in percentage than your toxic debt is.
4. Create an emergency fund
Maybe you’ve heard that you need a one month emergency fund.
In today’s time, that’s not going to cut it! Calculate your monthly essential expenses and aim to save a 5+ month emergency fund. How much you save and for how long will also depend on your circumstances, ie do you have a family, do you live at home with your parents, etc.?
Invest in the market, real estate—doesn’t matter which you start with, just start! Don’t know where to start? We recommend Episode 48 with Delano Saporu! He takes us back to the basics during his episode. We even have a list of questions you should ask yourself before you start investing, to make sure you go into this with a plan.
Did you know 66.50% of bankruptcy claims are tied to healthcare costs? Insurance—be that medical, life, home, renter’s—protects you and your wealth from unexpected events that could potentially eat away at your assets.
Let’s be more forward thinking next year and see how we can protect future you.
7. Create an estate plan
If we’re putting in all this work to build our wealth, let’s make sure that we can pass it down! As first-generation wealth-builders, we are never building wealth just for ourselves. You will not be able to pass your wealth down without an estate plan. We’ve partnered with Gentreo (affiliate link) to give you access to affordable estate planning services.
8. Earn more & diversify your income
This is the most important step in our plan to build wealth in 2021. COVID-19 showed millions of us that relying on a single source of income is dangerous. This is what most of us know, but it is also one of the riskiest things to do when thinking about your wealth-building. Let’s say you lose your job….then what?
As women of color, we face different roadblocks towards building wealth. The most common one? Being historically, consistently, severely underpaid for our labor. So negotiate that salary. 2021, we want what we deserve.
YQD + Better Help
We’ll be the first ones to tell you that your dinero is intimately tied to your mental health. We’re helping you out with your dinero journey; let Better Help help you out with your mental health journey.
This episode is powered by BetterHelp – Professional Support When You Need It, At The Fraction Of The Cost Of In-Person Therapy. Get 10% off your first month just for Yo Quiero Dinero listeners, just use the code “dinero” at checkout!
Check out these Yo Quiero Dinero Partners to accelerate your investing goals!
Investing is Step 5 in our list of how to build wealth in 2021. Check out the below companies that YQD trusts to get you started on your investing journey!
SoFi Invest – Fund an Active Investing account with $1,000 or more, and you’ll get $50 in free stock!
Public – Investing meets social media. Start trading with any amount of money, commission-free and chat with other investors about their moves today!
Webull– Trade stocks, options, ETFs, all commission-free, $0 minimum deposit. Now open an account, get a free stock.
Roofstock – Earn passive income by purchasing rental homes with tenants.
Fundrise – Invest in REITs & earn passive real estate income! Have your advisory fees waived for 90 days.
Rocket Dollar – Rocket Dollar account holders have the power to invest in any asset class allowed by the IRS. Invest securely and easily in Real Estate, Startups, and more. Open a Self-Directed Solo 401(k) or Self-Directed IRA with Rocket Dollar and put your money to work.
New Street Advisors Group – a commission free, fee-only fiduciary Registered Investment Advisor (RIA). Their mission is to provide transparent financial planning, portfolio management and investment advisory services to their clients. Check out our episode with their lead advisor, Delano Saporu!