Taking Steps towards Building Wealth
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I should have titled this article “10 quick ways to build wealth” to get your attention. On second thought, I realized that I, too, had browsed through more ‘wealth’ articles in the past than I care to admit and they all left me with an unrealistic pie-in-the-sky hope that only got worse over time. Well, I’m not here to dangle a make-belief carrot in front of you, but point out areas that you might have, unbeknownst to you, been walking in the opposite direction of wealth.
For starters, wealth is defined as an abundance of valuable resources and material possessions. That immediately tells me that there’s an accumulation that needs to take place to reach the level of abundance. Intuitively, we can also agree that the more effectively one can reduce areas of waste or eliminate things that expend our resources unnecessarily, the faster we can accumulate wealth.
BUILDING WEALTH OVER TIME
Not to sound too cliché, but I must remind you that the journey of 1000 steps starts with the first step. Some might step faster than others by figuring out efficiencies hidden in taking those steps while others may just focus on eliminating running aimlessly in one spot or around in circles. How many times have you held your breath for a too-good-to-be-true offer? Or intensified your focus on playing the lottery while neglecting other responsibilities? Or even indulged in a few luxuries because you’re expecting your tax refund or just your paycheck? You tell yourself that you ‘deserve’ it. Either way, nothing beats moving in the right direction on a daily basis.
I come from an immigrant family and while I am a US citizen and have called the US home for about two decades, I will never forget my initial observations in the first neighborhood my family moved into. In the affluent Highland Park enclave in Dallas, it was clear to me that even the so-called old money used wisdom to retain their wealth and keep it in the family. They kept up with laws that could affect their wealth accumulation, talked of future deals that would ensure continued wealth, and took losses in stride by learning from, not dwelling on them. In sharp contrast, my teenage friends lived in excess and I told myself repeatedly that I must not get used to those luxuries. In counterpoint to the excesses I and my friends enjoyed, I could clearly see the sacrifices and wise choices the parents and grandparents of the rich had made and were still making regularly.
We’ve all heard that building wealth takes time but I don’t want you to miss the wisdom nugget here. Become intentional with your actions and choices, even small ones, as they form steps in the right direction. A wise man leaves an inheritance and a great legacy for his children’s children. Think long term. Make the right choices daily. Practice delayed gratification…no one has ever died of it. Remember, you don’t deserve it NOW…you don’t deserve to continue like this.
DILIGENCE IS KEY
Excuse me for yet another cliché. Anything worth doing is worth doing well. It goes without saying or so we say but do we really practice this? Diligence is simply careful and consistent work. In other words, do things conscientiously and in excellence. Let’s face it; to be consistent in anything you need a clear vision and a sense of purpose as to why you are involved in that work or effort. I think I can help crystalize our formula for building wealth (implied from our wealth definition stated above). Building wealth = Increased Income + Decreased expenses.
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I will focus on increasing income in this wisdom nugget. In a nutshell, increasing income comes from providing a solution to problems around us. We get paid to think and to do….to add value. All things equal, increasing your education helps you increase your income. Also, valuing and nurturing relationships can yield dividends when increasing your income. When I speak at seminars, several people ask me what investments or real estate would make them the most money, the fastest. And my response to residual income questions is always so disappointing to them. You need the diligence to keep at any of the ingredients listed above to actually see significant successes. You also need to accumulate disposable income (can we dare to use the S word here? Save!) in order to invest for residual income to materialize. Go for substance. Enjoy the journey as you grow in diligence. I meet folks with multiple advanced degrees and when I try to get them to discuss or show off their acquired knowledge, they go fat on me. Upon probing, they tell me they barely made it through their degrees and that they are excited they at least have those certificates. What good is a piece of paper if you cannot contribute to a conversation on topics related to your field of study?
LEARN A THING OR TWO FROM THE ANT
Ants plan ahead. Period. And they are better for it. I promised previously to touch upon decreasing expenses. Well, here it is: Planning costs less…way less in most situations. I know you’ve heard it before but just in case you’ve had an excuse for every time prior to now, this one’s for you! I cannot stress the importance of budgeting. Yep, I said it. A budget is simply a spending plan. All research has shown that when you plan your spending and try as much as possible to keep to it, you almost always spend less. Conversely, when you don’t keep track of your spending, you end up feeling as though you’ve been a victim of identity theft. This would be a good place to mention that our spending habits have a lot to do with our emotional attachments and past experiences on money and finances. So I usually take more time to cover this area as it is easier said than done. However, with determination and addressing underlying emotions, I have seen the worst money managers turn into prudent spenders. I have seen planning pay off in small, unexpected ways. When I travel with friends for conferences, vacations, etc. I fly in on a direct flight and pay tens and sometimes hundreds of dollars less than I would have by saving and buying early. I qualify for higher loan or credit card amounts, with less finance charges and reduced monthly payments just by maintaining a good credit history. Not having a spending plan is costly and it translates to not being able to reach your full potential because of temporary whims. So what is the wisdom nugget here? On your journey to building wealth, focus on needs and not wants so that others don’t take advantage of you. Don’t help others build their wealth by paying more…plan ahead!
