Being wealthy is sometimes is a gift. If you were born a Rockefeller, Ford, or Walton, for all practical purposes, you were raised in an environment where wealth was practically assured to you. If you were so fortunate to be born in such circumstances, hopefully you’re grateful and aspire to become the person deserving of such a blessing. But what about the rest of us? How do you transform yourself from a limiting financial situation, or even poverty, to become wealthy?
I submit that while being wealthy is a gift or blessing (and yes, sometimes even a curse), becoming wealthy is a group of skillsets. Skillsets that can be developed. Let’s pick up from the last post where I said you must stop chasing money and start building wealth instead. We discussed using money as a wealth-building tool.
When you’re young and foolish (or old and foolish), you usually focus heavily on instant gratification. You want everything and you want it now. You believe the future is the future so there is no need to prepare for it now. In fact, if you’re like most people, you live on 115 to 125 percent of what you earn, and continually increase your debt load every year as you grow older. You can comfortably exist in this state if you suffer from either of two irrational beliefs.
The first and most prevalent belief is created by a suffocating army of marketers, brainwashing you to believe that going into debt is normal and plausible. Virtually everyone you know is in debt, so you just assume this is a reasonable way to live. Or you could be afflicted with the second belief, which operates on the assumption that you can continue to live above your means now, because at some future point you will experience a financial breakthrough that exponentially accelerates your earning ability above your ability to spend.
And this does sometimes happen, if your name is Mark Zuckerberg, Oprah Winfrey, or Mark Cuban. But if by chance the name on your driver’s license is not one of those three, the likelihood of this kind of a quantum leap in income happening to you falls somewhere between slim and not a chance in hell.
This means you need to develop the skillsets for building wealth. Going deeper into that, here are the three numbers that are the most significant to you:
The first skillset in your tool kit is the ability to live on less than you take in. This is table stakes just to sit in on the game of becoming wealthy. If you don’t accept this as truth, none of the other skillsets are likely to help you.
Next work to reduce your financial footprint, so you have more money to work with in the third category. Then you must take the money in the third category – the difference between your income and your living expenses – and find ways to put that money to work. We’ll explore that more on the next post. Until then, would love to hear from you below.