How to Build Wealth

What is wealth? Some people compare it to making money. Others speak of wealth on a spiritual or psychological level. No matter how you view it, I share with you here some advice on how to build wealth monetarily and mentally. For starters, wealth begins with us. It is our mindset. However, during the building of wealth, we have to protect it through diversification and shrug off any false perceptions about wealth.

Mindset

What type of mindset do you have? Is it one that propels you to success or one that creates obstacles that make life difficult? While I talk about money and how we see it, your mindset also affects every aspect of your life. There is a saying which I love. We reap what we sow. We may not reap in the same season that we sow the seeds but eventually with enough water and sunlight the seeds we plant grow. It is then that we reap those rewards of our hard work, trusting some mysterious universal law.

Yessenia Bailey, of WealthFit.com, wrote that a wealth mindset is a set of beliefs, habits, and behaviors that separates the wealthy from the rest. She is right. Having a wealth mindset separates the wealthy from the rest. It separates the rich in spirit from those poor in spirit. It separates those who gain wealth from those who waste it. A wealth mindset allows you to grow wealth instead of never having it. But what is it really? What and how do we cultivate it?

Honestly, I believe it is simple but requires discipline, sacrifice, and wisdom. Many people today could be rich if not for the desire to buy everything their eyes desire. Create a mindset that money does not equal happiness. Money is only a resource, or tool, which we use to obtain what we want. Discipline yourself to save. Learn to make money work for you instead you working for money. Let me say that again. Make money work for you instead of you working for money.

Build Wealth by Diversification

Never put all your eggs in one basket. This concept is at the heart of diversification. Many of the top investors use this concept to protect there assets. But what does it mean for you and me? Rob Berger’s article, How Diversification Works, And Why You Need It, explains many of the nuts and bolts of diversification. However, let me make it simple for you with an unconventional concept. Diversification is a must. Think about it like this. If all you ever learn and know to do is make bubble gum, then what happens if no one wants it anymore. You wont be able to do anything. However, what happens if you know how to teach, make bubble gum, write, or make others laugh? You create a situation where no matter the environment you have something others are willing to pay you for. Obviously, I am speaking in general terms but I believe my point is clear. Diversification creates and protects us. On a personal level it creates many opportunities for us. On an investment level it protects our money from disappearing. If one investment fails then we have another which can succeed. One method of many is to invest in stocks, bonds, and real estate. But if you are not able to invest money on that level yet, then invest in yourself.

False Perceptions

Get rid of your false perceptions. Often our eyes are too big for our appetite and we bite off more than we can chew. Many small time investors think they have to score big to succeed. This is far from the truth. Have you ever heard the saying slow and steady wins the race? I think the more accurate saying is being consistent and disciplined wins the race.

You do not have to wait for that one big move in life to get ahead. You do not have to wait to land that perfect job. You do not have to try and be the next Elon Musk. The reality is most of us we will not create a company which becomes a multi-billion success. Most self made millionaires have not achieved success over night.

Thomas Stanley, the author of The Millionaire Next Door, wrote that most multimillionaires in America don’t live in expensive homes. What we see on TV and in movies is not a realistic view of the average millionaire. The average millionaire may be driving a beat up cheap car. Good example, billionaire Warren Buffet never buys a new car. Check out the video on YouTube to see why. The majority of the rich and wealthy do not live above their means but rather they live frugally. It is the small things in life that matter not the amount of money you have.

Our perception about wealth and how to obtain it is often twisted by false perceptions of success. Success does not mean you drive a Lamborghini. Many Lamborghini drivers owe more than their own worth. If you want to obtain wealth, then practice discipline and make smart decisions with the money you already have. Stop focusing all your energy on making it overnight. You cannot eat an elephant in one bite. You can only eat one if you take one bite at a time.

If you would like to read more on investing your money or having a healthy mindset read my other articles Top 2 Healthy Mindset Tips and 3 Tips to Smart Investing.