The concept of building wealth appeals to mostly everyone, especially when realizing wealth isn’t just about having lots of money or things. Wealth means being in a position of comfort; knowing that you can focus on the important things in life: family, friends, and charity. Growing up, I always saw my family struggling with paying the bills because when mom would get angry she would make me well aware that raising me and my younger brother was not affordable! When did you start realizing it was time to concentrate on building wealth??
Depending on your personality (spender vs saver) the journey forth looks different, but you are all climbing the same mountain. So, if you’ve decided that the journey of a thousand miles begins with just one step, these four starting points are the foundation- available for everyone.
Saving more or spending less (doing both is like getting a 10 second head start) is the easiest step because you have immediate control over your money. “The Secret to being rich is easy: Spend less than you make.” The way this feels though is psychological, you have to exert self-control. Have you been to another country? We live in the lap of luxury compared to almost all other first-world countries. Don’t give in to peer pressure by feeling the need to keep up with the Joneses. Imagine you are 10 years older than you are now, ask yourself “How will this purchase make me wealthy 10 years from now?”
There’s a common pillar of people who have succeeded financially and it’s that they have lived within their means. It’s time to start budgeting.
Simple in concept, difficult in practice, you must earn more or start earning what you are worth. Everyone can earn more, but earning more isn’t as controllable as your spending/saving habits… The best way I can get across to you is: if you are hourly or salaried you can earn more by having a side income. Flipping things, like houses or cars, starting a website, eBay, etc. It’s time to earn what you’re worth. Maybe it’s time to ask for that raise? If you are commissioned, you either need to work harder or sell something else because if you are commissioned and doing great, you probably wouldn’t be reading this. Time to work harder and smarter!
Don’t go into debt. It’s hard to pay off. If you have debt, pay it off.
If you need advice ask me in the contact me form above. I’ll help you get in touch with someone who can give you a plan of attack to pay it off.
Only under circumstances, like for a company where the optimal leverage is a 60/40 debt to equity ratio, is this advice not pertinent. For personal use, debt should be a no go.
Whether or not you like it, inflation exists. The only way to beat inflation is to invest money in an interest bearing account whether that be stocks, bonds, ETFs, a mix of all these, mutual funds, REITs, indexed variable annuity funds, indexed universal plans, etc. etc. etc. the list is long and comprehensive. The point is, you can bury money in your backyard, but it’s not doing you any good.
Start with the basics and learn as you grow (go) like weightlifting and losing weight, unless you are being really risky the best thing to do is just start. Like Nike says “Just Do It”
Many baby boomers are coming to the realization that they should have started investing, even conservatively in something earning 4%-6%, when they were in their 20s. Regret is a powerful motivator. Fear is a survival instinct. Fear not being able to retire and make work optional and use it to your advantage. The ancient chinese proverb states “The best time to plant a tree was 20 years ago, the next best time is today.”
That wraps it up- really, just get started, the journey of a thousand miles begins with the first step and before you know it, you’ll be looking back and seeing things you could’ve done differently, but ultimately you’re going to be glad you’re ahead of the game.
What are you waiting for?