Living frugally and saving money is only one part of the equation. If you keep all your money in savings accounts or certificates of deposits, which pay next to nothing in interest, you are unlikely to build wealth, no matter how hard you work.
Remember, there are two ways to generate wealth: Own a successful business or invest in successful businesses. It is important to start investing as early as you possibly can and stay invested in the market for a reasonably long period of time, even if you manage to start a business, too.
Your primary focus should be on stocks and mutual funds. These investments will help you get tremendous returns in the long term. You can invest in domestic as well as international equities to increase your chances of getting higher returns on a consistent basis. Other investment choices include real estate, fixed income investments and commodities.
Depending on your preference, you can choose to invest your money by yourself or hire an investment professional to manage your portfolio.
Perhaps the most important thing you need to remember about investing is that you should stay invested irrespective of how the market performs in the short term. Never forget: The market will always crash at some point, but every time it crashes it has recovered spectacularly well. Do not panic at the first sign of a dip in the market and pull all your money out. The longer you stay invested, the better your returns are likely to be.