Ten Secrets to Building Wealth

Dear Young Wealth Seeker,

I have ten secrets of building wealth. But first…Happy Day! I hope that you are having a pleasant and successful day! 

Yes, I greeted you by labeling you as a wealth seeker, because I want to inspire you to seek wealth, rather than having just the goal of being rich. 

When I tell people this, there is a question that I often hear: 

What is the difference between being rich and being wealthy?

I go by the following definitions:

Rich means having a lot of income. For instance, I have personally known people that make $200,000 a year, I have also personally known people who earn over $1 million a year. Those people are rich. However, these people were not necessarily wealthy. In fact, I have known people that make $200,000 or more that lived from paycheck to paycheck, because they spent more per month than they earned per month. On the surface, they look like they are doing well. But, if they were to lose their jobs, their financial situations would start to fall apart rapidly, because they live off everything that they make each month.

On the other hand, wealth means that you can live off your assets, whether you work or not.

Ten secrets to Building Wealth – First…You have to understand that…Wealth is different. Being wealthy means having more than you need to live. It means that you are able to live off your assets whether you work or not, and being able to pass income assets to your descendents. 

Ten Secrets of Building Wealth

1. Accept that life requires money (at least for most of us.) So, rather than denying that money is important, we accept that money has a definite role in our society. I did not say that it brings us happiness. But, I did say that it is a necessity. It is a tool that allows you to get the things that you need and want. So, money is not evil. It is not good or bad. Remember, it’s just a tool. 

2. Accept that building wealth is your responsibility, not your parents. This does not mean that your parents should not leave you assets. It means that any money left to you by your ancestors is a bonus. You should not rely on that bonus. Even with the greatest intentions, something like a medical catastrophe could wipe out your parents’ money, and make them unable to leave you money.  Another example of how your parents can lose their money is through lawsuits. You have to put effort into creating your sources of wealth. 

3. Being of service to others is the way to earn money. The more you can help others, the more you can be paid. So, become a little less narcissistic. Figure out what  can you do to benefit others. Closely related: If what you can do for others is hard to do, it is likely to earn more money. For instance, becoming a surgeon takes a lot more time, training, and money than working the register at McDonalds. Therefore, the investment into becoming a surgeon pays more than the effort required to become the cash register operator.

4. The more people that know you, like you, and trust you, the more likely you will be able to earn money. So, get out, connect with, and interact with more people. More connections is better than fewer connections. In-person connections are better than virtual or online connections. As you create those connections, be sure to be honest and ethical. One thing I encourage you to do is to get out and help others, volunteer. It is a great way to meet other altruistic people, and to feel good about yourself.

5. You need to have more than one source of income. Early on you probably should have a full time job as your primary source of income. But, don’t stop there. Add more streams of income. You can add sources such as side hustles, and investments. Ultimately though, you want to have sources that are primarily passive or at least semi-passive. This is because the goal is not to burn yourself out working.   Furthermore, the number of hours that you can work is limited.

6. Always spend less than you earn, on a monthly basis. It should go without saying, but many people don’t run their financial lives as if they understand this: if you spend all that you earn, there will be nothing left for investments and buying assets. Not only do many people spend all that they earn, many people spend more than they earn on a monthly basis. Lots of people do this by using credit cards to fund their lifestyles. 

7. Keep track of your money. Keep track of your money so that you can know where it is going, how it is being used, and how much you have at all times. There is a saying that you cannot control what you cannot measure. So find a way to keep track of your money that works for you.

 

Last 3 of the ten secrets of building wealth

8. Get out of and stay out of debt. (The only debt that makes sense to have is in income properties.) Do whatever you can to get out of debt. Become frugal. Only buy the necessities. Even with necessities, be frugal. Eat beans and rice, if necessary. Then take the money that you have not spent on necessities and pay your debts off, starting with a focus on your debts with the highest interest rate(s) first.  Remember, there is a biblical saying, “…the borrower is the slave to the lender.” (Proverbs 22:7)

9. Never plan to stop earning money. Instead of planning to live off social security, think of social security as a supplement of your other sources of income. So, use your pre-retirement time to create long-term sources of income. 

10. Have faith. Believe in yourself, and keep trying. Have a spirit of perseverance. If one thing doesn’t work, after giving it some time, try something else. Appreciate all progress that you make, even a little bit of improvement over yesterday is better than nothing. 

Ten Secret of Building Wealth Takeaways:

• Money is a tool we use to get what we need and want. 
• Accept that building wealth is your responsibility, not your parents, regardless of whether your parents leave you money. 
• Being of service to others is the way to earn money.
• The more people that know you, like you, and trust you, the more likely you will be able to earn money.
• You need to have more than one source of income.
• Always spend less than you earn.
• Keep track of your money.
• Get out of and stay out of debt.
• Never plan to stop earning money. 
• Have faith in your ability to build wealth. 

Working to build wealth is something that everyone should do. I hope that the information that I have shared here inspires you to start. 

Bonus:

Remember that wealth is built slowly. Start today, and never stop. You’ll get there! 

So Excited About Your Future, 

Rich Mom

Do you want to learn more? Read My Posts:

Why Should I Invest?

Uh-Oh! Did You Forget Everything That You Learned In Your Financial Literacy Class? 

Spilling the Tea on How To Start a Robinhood Investment Account

One of my favorite ways to invest is through the stock market. 

If you are interested in starting to invest in the stock market, feel free to use my Robinhood link. I love the Robinhood app, and I use it every day. 

Robinhood is giving away free stock when you sign up for an account. 

If you use my Robinhood link, I may receive a small payment. But, it will not cost you any additional money. 

I appreciate the payment that I may get, because it helps to cover the cost associated with producing this blog. Thank You!

I want you to be:

Young, Building Health & Wealth