13 Lessons I've Learned About Building Wealth
In this article, we will 13 Lessons I've Learned About Building Wealth.
Building wealth isn't rocket science. However, it still is a skill. And the good thing is it's a skill any person can master.
Some of us grew up with different misconceptions about money. Before we get to the 13 nuggets that will help you to build wealth, you must clear your mind of any erroneous notions you have about money and wealth.
This is because building wealth first starts in mind. What you sow in the mind is what you reap in real life. If you think you can be wealthy, you will be. As someone once said: Attitude is like a car with a flat tire - you ain't going nowhere till you change it.
Below are the 13 lessons I've learned about building wealth.
1. Start
They say talk ain't cheap. But to build wealth, you must do more walking - and, yes, work - than talking. Stop talking about building wealth and start doing something. Stop planning and get down to execution ASAP. If you are not careful, you will be hit by analysis paralysis, and you will never start.
Start with what you have and where you are. Don't wait until conditions are perfect because conditions are consistently inconsistent. If you wait for the sea to calm down, you will never leave the port.
Starting does not mean you throw all caution to the wind. It means that, after doing your financial planning, you put your feet on the tightrope and proceed with the financial journey, regardless of howling winds and trembling rope.
2. Use what you already have
This sounds like straightforward, simplistic advice, but it is more than that. Often, in the pursuit of building wealth, many people ignore what they already have at their disposal and they rush after the next big thing. Sure, it is good to cast your nets far and wide, but do not discount what you have in your hands. They may believe that what they already have is insignificant.
Using what you already have also means utilizing your capital and not buying into the notion that it takes big money to build wealth. A bird in the hand is worth two in the bush. Sure, your "bird" may only fly you a short distance. But you must realize that, in the grand scheme of things, that is where you need to be at that particular time.
3. Budget
A budget does not mean you are stingy. It means you are playing smart, and you want to know where every last cent is going. A budget helps keep your expenditure in check. When you know where every dime is going, you will be in a better position to make financial decisions to aid you in building wealth. A budget will help you take care of dimes ... and dollars will take care of themselves.
Some destructive spending habits - such as impulse buying - can only be reined in by not only having a budget but also sticking to it. Small holes - like carelessly spending "small" money - sink big ships. As they say, the devil is in the details. Do not ignore the little things and put all your focus on the big picture.
4. Rome wasn't built in a day
Wealth is built over years of grinding and failing and getting up and doing better. And if you are building generational wealth, you better be ready to put elbow grease over many years.
Be patient. Lay one brick at a time. And when it seems like there is no end in sight, use the power of visualization to propel you forward. What will your life be like after you've built wealth? When you feel like giving up, see the images of yourself out of debt or living your best life.
5. Consistency, consistency, consistency
Once you set sail on the journey to build wealth, there is no stopping or turning back. When a client seeks my coaching services and tells me they have "tried" several businesses to no avail, I know they are primed to fail in their desire to build wealth.
Why do I say this? If you are trying to build wealth, you don't try. You do the work, regardless. Trying means throwing in the towel at the first sign of a challenge. And - unless you are doing multiple income streams - you don't try several businesses.
6. Trust the process
Building wealth is not an event. Neither is it a destination you will arrive at. Building wealth is a continuous process that takes you from one level to another and from one dimension to the next. If you look at creating wealth as a destination, you will be plagued by the "arrival syndrome."
Building wealth ought to be an enjoyable endeavor because aiming at a goal will free you of financial stress. If you love the process, you are more likely to keep going in adversity.
The process may also mean learning a new skill, upgrading equipment, creativity, or experimenting.
Read More: How To Create Your Signature Offer
7. Harness the power of partnerships
We live in a time where everyone wants to own their hustle. And there is nothing wrong with that. But sometimes, you will require skills, connections, and financial capital from other individuals or institutions to build wealth.
Solid business partnerships will provide you with something you may be lacking. This is seen in TV programs such as Shark Tank, where entrepreneurs - some doing well - still pitch their businesses.
To paraphrase that famous adage: If you run alone, you will run faster, but you will run out of steam. But if you run with a partner, you will go further, and you will have support when it's one of those days.
8. Multiple streams of income
Before you think of adding multiple streams of income, keep the important business important. Do not sacrifice your main hustle for side hustles. Different income streams are great but often take away vital resources and attention from the business that's the lifeblood.
When you are doing multiple streams of income, do not spread yourself and your resources too thin. Only take on what you can manage comfortably.
9. Perseverance
There will be times you will feel like quitting. But don't quit. If you fall, get back up, dust yourself off, evaluate the lessons learned, and do better. Entrepreneurs fall all the time. But the difference between the ones who build wealth and those who don't is stick-to-it-veness. They are committed to the game, and they know falling is part of the growth process.
10. Sacrifice
There will be times you will be forced to do tens of hours per day, back-to-back. This can be at a job or your business. There will be months - and probably years - in your entrepreneurial journey you will not take pay or break even.
You may even be forced to sacrifice time with your family. Look at the end game. Comedian and multi-faceted entrepreneur Kevin Hart said it best: "I know my family wants me home ... but if I don't do what I am doing, they won't have a home."
11. Assets versus liabilities
To increase your net worth, the golden rule is to keep your assets high and your liabilities as low as possible. Assets such as your stocks and real estate will increase your net worth. Mortgages and car loans are liabilities that cause your net worth to plummet.
Assets are not just wealth, but they are also building blocks of wealth. You can sell assets and invest the proceeds in other wealth-building ventures.
12. Save
"Save first, spend later." That should be your motto. The best way to stick to this maxim is to request your bank to put a specific amount of money in a separate savings account each month you get paid.
Saving alone may not build wealth, but it will accelerate the process. Besides, it will give you the morale to keep going. Building wealth is a discipline. So is saving money consistently.
13. Good sense over greed
Avoid get-rich-quick schemes. Take all the time to study every investment opportunity you come across. Social media is full of influencers selling snake oil to unsuspecting people. Be guided by good sense and not greed.
If there is a faster way to sink into poverty, it is to put all your life savings and hopes in a scheme that is too good to be true. There is no elevator to the "wealth penthouse"; only a staircase. Take the staircase. Always.
Unless you've hit the jackpot or inherited a large sum of money to make you live comfortably for the rest of your life, wealth is built slowly over several years.