Building wealth doesn’t have to be a complicated process but you’ll need self discipline and a plan to meet your financial goals
I’ve always had a good metabolism and never found it too difficult to keep in shape. Even after the constant exercise routine in the Marine Corps, I never had a weight problem and always wondered why so many struggle with weight loss.
After all, it’s simple right? To lose weight, you need to burn more calories than you consume. You don’t need a fancy gym or personal trainer, just eat less calories than you spend each day.
As I get closer to my 40s, I’m starting to understand how much harder it really is to keep those six-pack abs from becoming a keg. It takes real discipline to make my daily run and I can’t indulge in as many snacks as I used to with the family.
It turns out, building wealth is a lot like that as well. While a million and one blogs want to sell you the secret to retiring a millionaire tomorrow, the basics of building wealth are pretty simple.
Spend less, save more and invest responsibly.
Building Wealth through Spending Less and Saving More
Ok, so it isn’t always easy to go to save money. Just as those baby back ribs call you to break your diet, easy credit card offers are constantly calling you to break your plan for building any real wealth.
The most important part of a good diet is building the habit of eating right over a period of a few months. Those cravings aren’t just going to go away. You have to work at a diet so your brain no longer associates certain foods or overeating with pleasure.
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Financial dieting is the same way, you need to keep to a budget for months to retrain your brain that you don’t need a 3,000 square foot house or that new tech gadget just to be happy. The good news is that once you form good spending habits, about 66 days according to research, then your brain will be on wealth building auto-pilot.
- One of our most popular posts talks about focusing on the four most important parts of a budget and setting realistic financial goals. Make your budget easy and you’re more likely to keep it.
- Take advantage of all the easy money you can like these 16 easy money tax tips to help save money without sacrificing too much
- Take an honest look around the house and you’ll find all kinds of “stuff” that you really don’t need or even want. Turn that stuff into financial freedom and put it to your wealth plan
- I’m excited about our newest writer, the Frugal Grandma, who is posting a weekly article on how to save money. She recently posted a way to cut your clothing budget in half and retire rich with garage sales
Just like eating less to lose weight, your spending plan may not save you a ton of money at first and you might hit a few hurdles along the way. Stick with it, trying to save a couple hundred dollars extra a month and build up to saving even more money as your good spending habits develop.
Building Wealth through Investment
Some people can sit on the couch, eat potato chips and still look like Greek gods. Others can get away with almost no exercise if they watch what they eat. Then there are some that need to hit the gym five days a week just to remain moderately healthy.
It’s the same way with building wealth. Some lucky few are able to spend their family’s fortune and never worry about the poor house. Most of us need to make our money grow through investment if we’re ever going to build enough wealth to meet our financial goals.
While investing pundits on TV and the net would like you to believe otherwise, building wealth through investment doesn’t have to be complicated. You don’t need to get the latest stock tips or strike gold on the next big thing.
- Investing basics are actually pretty easy, just setting up a schedule of regular deposits and investing across a group of stocks through an exchange traded fund. Don’t worry about “the market” or if prices are up or down.
- Understand what kind of a return you need to meet your financial goals is the first step in creating your own personal investment plan. Starting without a plan is like going on a trip without knowing where you are going.
- Getting started investing to build wealth doesn’t have to be scary or uncertain. One of my favorite PeerStories is from blogger friend Miranda Marquit and how she discovered that ANYONE can start investing.
You won’t retire rich overnight by sticking to a reasonable investment plan just as you won’t shed 100 pounds in a week on a weight loss program. You also won’t see your wealth vaporized during the next financial meltdown either. Combine a smart plan of spending less and a reasonable rate of return for building wealth and it won’t take long for you to realize how easy it actually is.