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When it comes to learning how to build wealth, it pays off to look at well-known money makers who have demonstrated how to build wealth while minimizing risk. Rather than hoping to build the next big startup or social media site, implement these safe strategies for wealth generation.

Build Smart Money Habits

The richest man in the world, Warren Buffett, is a great example of how to grow money without taking on extra risk. Risk — be it gambling, playing the lottery, or investing in penny stocks — promises a slim chance that you’ll win big. Yet many people buy daily lottery tickets or gamble away hundreds of dollars and never find their winning streak.

To build wealth safely, you must first develop good habits through small consistent actions. Start by reducing your expenses. Separate your wants from your needs, then spend only on necessities and cut down on impulse buys. Next, pay off your debts and don’t take on new ones. Warren Buffett is famous for paying cash, even for big ticket items like homes. If you have debt, negotiate with creditors to shave off interest points or pay part of what you owe. Once you’re debt-free, live within your means. Finally, save money before you spend it by paying yourself first. Simply taking these three steps will help you develop the frugal habits that can allow you to start growing wealth.

How to Build Wealth Without Taking on Risk

To increase your overall worth, you either need to earn more money or work more hours. Many wealthy people put in far more than 8 hours a day. This was the finding author Tom Corley made when he studied self-made millionaires. When you consider another billionaire, Bill Gates, it’s easy to see the relationship between hard work and high wealth. Gates may have gotten lucky with Microsoft, but he put in a ton of work when building his company.

If you can’t command more money at work, consider taking a second job after hours to increase your earnings. Then save all the extra money. If you’re struggling to pay off debts, earning more (and saving more) is vital to success. Once you are debt free and saving, you can implement advice from millionaires and billionaires like Buffett to help you further in building wealth.

One proven way to build your net worth is to learn about investing, then make smart investment decisions. You can start by reading personal finance books, taking e-courses on retirement planning, tracking the markets and jobs reports, and researching any company you’re considering investing in. Hiring an investment banker to manage your money is another option but make sure they’re looking out for your interests rather than their own.

Buffett recommends that everyone invest 10 percent of their money in short-term government bonds and the rest in an inexpensive S&P 500 index fund (which tries to match the performance of the S&P, exposing you to a wide range of investments). This strategy can help reduce investment losses. Once you’ve invested money many advise to keep it invested rather than following the whims of the stock market.

And remember, good wealth building smarts are built incrementally. Everyone has to start somewhere. Slow and steady is infinitely better than rash and risky. Every step you take toward making smart financial decisions or learning about the market helps you build the skills, confidence, and knowledge you need to make decisions that will grow your wealth over time.

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