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How to get rich. What are the climbing steps to getting rich?

There are 8 climbing steps to getting rich.

STEP 1. Build a Good Credit score.

The way to build your wealth and get rich starts with developing a good credit score. A credit score of 700 U.S dollars will let you apply basically for any credit card. Similarly, a credit score over 740 U.S dollars will generally get you the best interest rates on any mortgage or loan product you apply for.

Step 2. Stock portfolio over U.S. 25000 dollars.

Having a portfolio worth over 25,000 U.S. dollars bypasses the patent day trader rule. Not everyone wants to be a day trader. It gives you a certain amount of flex value and indicates your portfolio is a certain size.

It’s a good milestone though. The rule is that if you have a margin account and you day trade, ie. Buy and sell the same stock in one day. Similarly, you do that over 3 times in 5 business days.

As long as it represents over 6% of the total trades for that period your account will get marked as a patent day trader account. If your account has less than 25,000 U.S dollars in it, then you will be unable to day trade. You can trade until your balance reaches over 25,000 U.S dollars or if the flag on your account is removed. Basically, Finra.org put this rule into place to protect people.

Finra.org wants to see that you have a certain amount of money before they let you participate in certain financial activities. Most people use the stock market in order to save up to buy a property.

If you are doing that you are going to end up with a stock portfolio worth over 25,000 U.S dollars before you cash it out for that down payment. If your account reaches over 25,000 dollars and you don’t want to buy a house that’s ok.

You can keep growing it, Finra.org isn’t limiting you, you can buy and sell. However, you choose because you are rich enough to be trusted. Anyways it’s a big milestone on your wealth-building journey. Now you have your down payment and you have a good credit score, you are ready for the next step.

Step 3. Own a primary residence.

Owning your own home is a big milestone. Not everyone will necessarily want to buy a home. Some people rent where they live. They may have a portfolio with thousands of dollars worth of stock or may have a rental property. But for a lot of people owning their own home is something they want to do. 65% of homes in the United States are owner-occupied.

It has its advantages such as building equity at your home that you can borrow money against deductions. Such as a mortgage, interest deductions, etc and just being able to modify the house.

The act of saving enough money for the down payment and closing stock requires a certain amount of financial stability. There are certain types of loans, such as FHA loans, where you can put 3.5% down. Or VA loans or USDA loans where actually you can put zero% down.

This may not be a huge outlay for some people. However, the average down payment for a house in the United States is 6%. While its current market value of about three thousand dollars would be eighteen thousand dollars in down payment.

The average home in California, which average value is [725 dollars] is Seven hundred and twenty-two thousand dollars. That would be over forty thousand dollars in down payment.

So most people who buy a house will end up with 25,000 U.S dollars or more bypassing the patent day trader rule before they withdraw their money. You also will need a good credit score like step one. You also need a good enough debt to income ratio that they can get approved for a mortgage. That’s why owning your primary residence and anyone done it should be proud of it.

4. Accredited investor.

There are 13 million households in the united states that have credited investor status. That’s only 10% of United States households. Being an accredited investor opens up financial opportunities that otherwise not be available to you.

But first of all, how do you become an accredited investor?. The two main common methods are either earning at least 200,000 dollars a year for two years in a row or 300,000 dollars a year.

Example If your household income is split between two spouses and neither of them earns over two hundred thousand dollars. Or none has over one million dollars in net worth excluding your primary residence. There are a few other financial qualifications that can also get you accredited investor status. But these are far less common.

So what does an accredited investor let you do? Accredited investor lets you invest in startups. That is Companies that are not public can give you the potential for great gains. But it also can be a little risky. This is why just like the pattern day trader rule.

The securities and exchange commission hold back certain financial opportunities from you until you are rich enough to be trusted. But even if you are not an accelerated investor there is still a way that you can invest in startups and that is through the start engine.

They are an equity crowdfunding platform that allows either accelerated or non-accelerated investors. Like the opportunity to invest in startups through something called Regulation CF and Regulation A-plus. There are also some limits on the amount that you can invest, especially for nonaccelerated investors.

But this shouldn’t be an issue to most users and it does protect you from excessive risk. The platform has over 600,000 potential investors in their community and has invested over 450 million dollars through regulation CF and Regulation A plus to date. They have some serious business people behind them. If you are interested in investing in startups.

Step 5. One million dollars worth.

If you include the primary residence in the calculation, it is a lot easier to hit a one million dollar net worth. Remember the average house in California costs seven hundred and twenty-two thousand dollars [721 $] in the year 2021. That’s just the average house.

So if you are someone, who owned their house for many years, perhaps you already paid off the mortgage. The house has appreciated a lot in value and then adds in a few hundred thousand dollars extra in investments. Wow, you are at one million dollars.

This is also deceiving statistics because if you wanted to sell that house yet still appreciate the same level of lifestyle in the same area of the country. You would have to buy another equally expensive house.

So you don’t really benefit from that level of net worth. You are not a millionaire in the truest sense. That type of title is reserved for the next type of step of wealth building.

Step 6. The net worth of 1 million U.S dollars + Net worth excluding primary residence.

Households in the United States are currently at about 13 million. You can also say 8% of the United States population. These are millionaires in the truest sense of the word. The net worth is invested in assets such as rental properties, stocks, and crypto that give them some appreciation, and perhaps some cash flow.

You could still be a millionaire if you invest all your wealth in a garage full of Lambos. In most cases, it will be assets that generate wealth. Statistics have shown that most millionaires own three properties with a total portfolio value of 1.4 million dollars.

So you can see being a millionaire isn’t really special anymore. There are a lot of millionaires, but what is special is the next step.

Step 7. The net worth of 50 million U.S dollars net worth.

Having a 50 million dollar net worth classes you as an ultra-high net worth individual. I don’t think you want to be in this group as I’ve heard they face a lot of problems.

Individuals face changing tax codes for estate planning, maintaining their lifestyle, and retirement. It sounds like a headache, perhaps we should start a charity to help these people out.

Maybe a kind of reverse charity. Where they unload their problems, by unloading their wealth to the people who reserve donate to the charity. According to credit swiss, there are 89,000 people in the United States who have a net worth of over 50 million dollars.

Step 8. The net worth of over 1 billion dollars.

That’s the last level. You have reached maximum net worth. You are a billionaire. According to a recent Forbes list, there are 724 billionaires in the United States and 2,755 worldwide controlling over 13 trillion dollars in wealth.

To be honest, I don’t expect most people to even think about reaching this level. I just mentioned it because it is the ultimate goal for a wealth builder.

I think the realistic goal for most people is to reach 1 million-plus net worth excluding primary residents. So what level you are thinking to reach.

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