The corona virus is now officially a pandemic and sadly, many are getting sick and far too many people are dying. The cost of losing lives like this can’t even begin to be quantified. After that is the disruption and financial cost. There are about to be millions of people laid off, and tens of millions more who will be facing reduced hours and income. Occupations like restaurant workers, ride share drivers, and movie theater employees are the first to be noticed. But they most certainly won’t be the only ones affected.
To ensure the safety of my attendees I moved my TRIBAL Event to August, while taking a 200K hit on that. Some of the multi-million-dollar companies I consult with are facing supply chain interruptions that are costing them millions (with all the ripple effects down the line). This pandemic is going to affect everyone in the world in one way or another.
Since I’m experiencing this myself, and hearing from many of you as well, it seems this would be a good time to talk about building wealth again. That $200,000 that instantly evaporated from my cookie jar was money. Cash that I would be paid for providing a service, in this case conducting the event. Money is good. Personally, I like money a lot because while money doesn’t solve all of your problems – it does solve all of your money problems.
But money is not wealth. In its essence, money is a tool you can use for two purposes:
In the first use, you’re employing money as a medium for exchange. This a good and necessary use for money, whether we’re talking about fiat currencies controlled by governments or independent cryptocurrencies. But if you spend all your time and energy trying to acquire more money, you might actually be hurting your progress towards creating wealth. And lose sight of something important: The most elegant use of the money tool is using it to create wealth.
So how do you do this?
One simple way is using your money to multiply more money. Money in an account earning interest is an example of this. In my eyes, money by itself isn’t really wealth, but if that money is creating more money, it’s actually building your wealth.
If you take some of your money and use it to build a factory that produces products you can readily sell, your factory is now part of your wealth. If you take some more of your money and put it to work with a programmer who builds a software you can sell as a service, once again you’re producing wealth. Building wealth can be as simple as using money to open five lemonade stands.
Don’t rest or believe you’re secure because you’ve amassed a large amount of money.
No matter how much money you have, it doesn’t qualify as wealth. Because if an emergency comes us that disrupts the global economy like Covid-19, you’re going to have to dig into your stash to survive, meaning your net worth starts going down every day. Or your government arbitrarily devalues your currency. Or your cryptocurrency evaporates into thin air.
Like I said, I like money. You should too. But the key to becoming rich is to reduce the percentage of your money you use for daily living (groceries, rent or mortgage, entertainment, etc.) and increase the percentage of your money you use for building wealth.
It really doesn’t matter if you choose to slash your expenses or be creative and find ways to earn more money. The important factor is how much of that money you can direct to creating wealth.