Ways to Increase Your Wealth When Your Income Is Flat – The New York Times

Income inequality can arise from a number of things, like gender, race, social class and education. We know it’s an issue. But the most recent recession revealed what may be an even bigger problem: wealth inequality.

When we talk about wealth, we’re referring to everything you can claim as an asset, including savings accounts, your home and all your investments. With wealth, we can gain access to better financial opportunities. It can mean having money to invest when stock prices are low, as they were in 2009. It can also qualify us for more favorable loan rates or allow us to avoid borrowing altogether because we have enough savings to cover large expenses.

Even if you make a decent income, your wealth may not be growing. After all, if you don’t have money to save at the end of the month, how can you possibly increase your wealth?

Many observers have made valid arguments that the system itself is broken. If incomes aren’t growing, then how can people ever get ahead? Plus, investing is so complicated, how can the average person ever get started? These are valid concerns. But instead of just complaining about the system being broken, there are some constructive things we can do.

If you don’t have money to save, that’s a problem. But choosing to do nothing isn’t a good answer. If you’re serious about finding a place to start, an obvious choice is to spend less. There are plenty of resources available on how to budget, but one of my favorites is the combination of tough love and common sense found at Mr. Money Mustache.

The other option is to explore making a little more on the side. I’m not talking about a lot. If you could figure out a way to earn a couple hundred dollars extra each month and put it into savings, it would add up over time. Ramit Sethi excels at helping people figure out side projects to pull in that extra income.

If you do have money to save or invest, but you’re in debt, Dave Ramsey offers some of the best advice out there for dealing with it. I don’t like his advice about investing, so please ignore it. His approach to paying off debt and building up your savings, however, really works.

Once you’re ready to take the next step and start investing a little bit, I recommend ’s “The Little Book of Common Sense Investing.” It’s practically an investor bible, and Bill Schultheis wrote another helpful book called “The Coffeehouse Investor.” My colleagues have written two helpful books too: ’s “The Smartest Money Book You’ll Ever Read” and Larry Swedroe’s “Think, Act, and Invest Like Warren Buffett.”

There have never been more options to help you get started investing. Vanguard offers index funds with a minimum first deposit of $3,000. The minimum additional deposit is $100. However, if that’s too much, Acorns, the service I mentioned last month, requires a minimum of only $5. Both investing options represent a reasonable entry point for new investors.

I know what I’m suggesting won’t solve income inequality or the wealth gap. We could, however, be doing something positive in the meantime and helping others we know do it too. One good action can lead to other good actions. It doesn’t matter if you decide to deal with your debt, add to your savings or learn more about investing. All that’s required is that you do something productive for that good thing to happen.

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