YOU don’t need to cut back on takeaways and stop buying lattes to get rich. In fact, there’s no need to spend less at all, according to financial expert Laura Linden.
Laura, a financial strategist and accountant who has made a career turning around struggling businesses, has revealed some common myths that are holding you back when it comes to increasing your wealth – and she says anyone can get rich.
Brits believe you need to be earning a huge £213,000 a year – six times more than the average salary – to be rich, according to HSBC.
But it’s no surprise, with rising inflation, high interest rates, and wages not rising far enough, that one in six of us have no savings at all, according to Finder.
Chances are you’re not on a high salary, but Laura Linden, author of UnF*uck Your Business Finances: Unlearn the Shame, Reclaim the Power and Change the Game, believes her mindset tips can help ANYONE turn their finances around.
She also warned that many of us are caught up in money myths passed down through generations, such as all debt being bad and that cutting back on small pleasures will make a difference.
“Forget scrimping on takeaways or cutting back on lattes,” Laura says. “The truth is, the people who build real wealth don’t get there by penny-pinching, they get there by thinking differently.”
The 44-year-old from Guildford, Surrey, reveals the top five money myths stopping YOU from boosting your bank balance.
MYTH 1: You should pay experts to build wealth for you
Rich people always pay experts to help make them richer, whether it’s a financial adviser, accountant or tax experts – but you can do it yourself.
Teaching yourself about how money works and what your options are for saving, investing and building your wealth can stop you from “blindly following advice” that might not work for you.
Laura suggests starting with simple tricks for building wealth in a tax-efficient way, for example, researching the best savings accounts or how you’re going to grow your pension.
Many rich people will pile money into their pension because it is just about the most tax-efficient way you can save, as the government gives you a really generous tax relief on your contributions.
The tax relief means that for every £80 you save, the Government tops it up to £100 (if you are a basic-rate taxpayer) – so you effectively get £20 free.
If you don’t have a tax-free savings account, called an Individual Savings Account (Isa), then they are worth exploring.
You can save a whopping £20,000 each year without needing to pay any tax on money you make from your investments or interest earned from savings. (Although Rachel Reeves is said to be eyeing up some changes to these in the forthcoming Budget).
Outside of ISAs, rate taxpayers can earn up to £1,000 in interest tax-free, while higher rate taxpayers can earn £500 in interest before paying tax.
MYTH 2 – All debt is bad
Many of us grew up being taught that being in debt is bad.
But Laura believes we shouldn’t be afraid to temporarily get into debt to get to our goals, as we all need to invest in ourselves.
She says: “Most people are happy with a mortgage but terrified of any other kind of debt.
“Learning how money works, building skills or getting advice isn’t a cost, it’s a compound investment that pays you back for life.”
She describes “good debt” as investments that will help you eventually build more money. For example, that could be buying a property that you plan to rent out as an Airbnb, or taking a course in how to start your own business.
Bad debt, on the other hand, comes from simply overspending and having to borrow, such as from splurging on holidays or fancy meals out you can’t afford.
Laura adds: “As long as you’re borrowing money to do something with it that either brings you income or makes you better qualified, that isn’t always debt you should be scared of.”
She suggests separating your debt into two categories – things you just need to pay off, like an unexpected car repair bill, and debt for things that will eventually pay you back, like taking a course in something you’ve always wanted to learn.
And, of course, always avoid spending beyond your means if you don’t think you’ll be able to pay it back.
Easy money habits that can boost your wealth
GET into good money habits and boost your wealth – it’s easier than you think.
Wealthy people often save money by paying for their car insurance in one go.
This is because most insurers charge you interest if you pay your bill in instalments.
Paying in one go could save you as much as £46 on the annual price, according to research from Compare the Market.
Set up direct debits to move money into your savings when it’s pay day – that way, you won’t be tempted to spend any extra leftover at the end of the month.
Look into money saving apps like Plum – it has a feature where it will automatically save money on pay day. For quieter months, you can set it so that you’re saving more.
Set a 50/30/20 budget. This is where where 50% of your money goes on essentials like the rent or mortgage and food shop each month, 30% on nice-to-haves like meals out and new clothes, and 20% into savings.
Don’t spend your money without seeing if you can get cashback on your purchase first.
Sites like QuidCo and Topcashback offer money back on purchases such as insurance, holidays and clothing.
MYTH 3 – You need a 9-5 job with a big salary
You might think that to be classed as rich, you’ll need to be a City slicker in a suit earning a six-figure salary.
But if you define what “wealthy” means for you, then you’ll have a way better chance of achieving it.
Laura says: “I think we see ‘rich’ and ‘wealthy’ and we think of cash – and it’s not. You have to redefine what wealth is to you.
“Is it working less and spending more time with your kids? Is it having a bigger house? Is it starting your own business so you can quit your job?
“I think people have to get rid of that vision of a pile of cash somewhere and see it as buying yourself the freedom to live how you want to live.
“That can even mean scaling back a little bit on your spending so you don’t have to work as much, so you can have more time with your kids.”
Once you’ve defined your version of wealth, it makes it easier to research the next steps you should take.
That could be putting more in your pension pot, aiming to go part-time from work, starting a side hustle, selling your house or downsizing so you can afford to travel – the list is endless.
She also urges people to stop living by the same “playbook” of previous generations of getting a 9-5 job and staying in it for 40+ years.
With more people being laid off due to the rise in technology like AI, she believes having just one job isn’t as “safe” as it used to be, and it’s more important than ever for people to have different streams of income.
MYTH 4 – You need an idea that would win The Apprentice
You don’t need to be the next Bill Gates or Richard Branson to become a successful entrepreneur.
Wealthy people make their millions by finding a gap in the market for a product or service and turning it into a big business.
There’s no reason why you can’t use this same trick and build a side hustle into a lucrative career.
If you have a unique skill or party trick, or perhaps there’s a topic you know loads about, why not try to monetise it?
Laura says: “I think everyone has little skills or things they’ve learned that would be of value to someone else – and that can be a really cool way of making money.
“You might have experience with raising an autistic child, or maybe you know how to bake the perfect pastry case or cake, how to sew, how to keep plants alive.”
She encourages people to think outside the box when it comes to finding their niche.
For example, if you work as an electrician, you could teach people how to change light bulbs or how to fix other electrical appliances in their home, alongside your day job.
Once you’ve found your niche, posting to social media is a great way you start monetising it, Laura says.
Millions post their tips on TikTok and Instagram, but you could also do a Facebook live “masterclass”.
If you’re camera-shy, try making PDF “cheat sheets” or recipe cards that you could sell on online marketplaces or even by setting up your own website.
It’s also a great way to make some tax-free income. If you have a side-hustle, you can earn up to £1,000 before you start paying tax under the UK’s trading allowance.
MYTH 5 – You shouldn’t haggle, it’s stingy
Haggling for cheaper bills isn’t stingy or embarrassing – it’s a money superpower.
There’s no reason why you shouldn’t try to negotiate for smaller bills – and a higher paycheck at work. These two small steps could instantly make you thousands of pounds richer.
The first step is to negotiate a discount on your essential bills like broadband, car insurance, mobile phone, and energy.
Laura says: “It takes a bit of bravery to do it because our default is often to just go ‘Ok yeah, I’ll pay that and not ask any questions’.
“But there’s no harm in negotiating and asking: ‘Can I get that any cheaper, can I get a discount, can I pay a bit later?’”
“Just remember that you’re the customer and they want your business, so if they can do something with the pricing, they will.”
Do your research before you negotiate – check comparison websites and see if you can find better deals before you call your supplier.
Timing is key. Rather than letting your policy auto-renew, speak to your supplier three to four weeks before your new contract begins, as this will give them enough time to respond with a better offer.
Always be polite, but if you don’t get the deal you want, you can always threaten to go somewhere else.
It’s not just your bills you should negotiate – it’s your pay too.
She says: “A lot of the time we just don’t ask, we wait to be given a pay rise.
“But there’s no rule that says you can’t go to your boss and explain that the cost of living has gone up, your kids are getting older, and you haven’t had a pay rise for a year and that you think you deserve one.
“Of all the small businesses I work with, people are constantly going in and asking for a pay rise and nine times out of ten they get it.”
Find out what other companies are paying for your role before you ask your boss for a pay rise. If you’re being paid less, then ask your company to match the salary.
“I think that’s the big difference with people I know who are wealthy and have built businesses – they back themselves with everything they do,” Laura says.
“They throw themselves into things with the mentality of ‘what’s the worst that can happen?’”
Seven things rich people do that make them wealthy
- Start a side hustle: Wealthy people maximise their wealth by earning money from different sources, such as rental properties and investments. You could start small, for example, by pet-sitting, and then use the money to set up your own business.
- Time is money: Rich people value their time as they know they can use it to make money. You too can implement this habit. Every time you want to say yes to something, stop and think about if it’s a good use of your spare time and if you can afford it.
- They send their kids to private school: You may think this is only for the elite, but you can send your children to private school for free. Read our guide on how you can do this here.
- They don’t give money to the taxman for free: Rich people avoid this by using up all their allowances, for example, through putting their savings in a tax-free ISA.
- Invest for the future: Wealthy people check their pension pots to make sure they’ll be able to afford the life they want later on. If you want a moderate retirement, you’ll need an income of at least £31,700 according to Retirement Living Standards.
- Team up to save on tax: If you’re have a husband or wife, you can use your marriage allowance loophole to transfer some of your unused personal allowance to your partner to reduce their tax bill.
- Save smarter: Higher earners often set up many direct debits to their pension, savings and investment accounts, so they always pay themselves first and stay on track to meet their financial goals.