Individuals seeking to build wealth have used a wide variety of methods, strategies and plans. There are tips about what you should do and what to avoid. However, building wealth is more intricate than simply saving money or investing in all the “right” places, whatever that means.
Building wealth is a way of living that requires fundamental tools that every person, including you, can have, starting with patience and discipline. Once you’ve got these tools, you are ready to dive into learning more about wealth building.
What Is Wealth?According to Merriam-Webster, “Wealth” means having an “abundance of valuable material possessions or resources.”
It’s the word “abundance” that means something different to different people.
For one person, having wealth means having the funds that allow them to live a certain lifestyle. Others claim that they have attained wealth when they are able to securely and permanently live off of the money they currently own with no continual income.
Determining what wealth means to you is an important, and often overlooked, step in building wealth. Without a specific goal in mind, wealth can seem impossible to attain.
Why Build Wealth?The most simple reason to build wealth is to improve your well-being. Like it or not, a person’s happiness is influenced by the amount of money they make.
“When I looked across a wide range of income levels, I found that all forms of well-being continued to rise with income,” Killingsworth said. “I don’t see any sort of kink in the curve, an inflection point where money stops mattering. Instead, it keeps increasing.”
Building Wealth Serves as a Hedge Against InflationStability is one of the main reasons people build wealth. A steady income means a person will have reliable resources to meet their needs, and building wealth allows one to take care of their family and often secure their legacy.
When economic crises occur, it can be more difficult to rely on economic soundness. Recent inflation has had a damaging impact on many people’s happiness as they continue to watch prices rise.
Gold Alliance CEO Joseph Sherman said he believes that the American Dream of building wealth lives on. Sherman and his company are experts that assist individuals seeking to diversify their retirement funds with precious metals, and they believe that security matters.
“Historically, some of the most secure investments are found within physical assets,” Sherman said. “This is important to note since hedging against inflation comes from making the right investments and diversifying your portfolio with assets that will stand the test of time.”
As Sherman said, security is the way to combat inflation. As long as you invest wisely, your savings account will outlast economic hard times. Yet, you have to diversify your portfolio and determine the best ways to grow your savings.
What Are the Top 3 Ways to Build Your Net Worth?Once you have an idea of what wealth means and understand why building it is important, we can explore the top three ways you can make wealth-building a reality. While some of these steps may seem intimidating, with the right resources, growing wealth is possible.
1. Start a BusinessBusiness owners are simply the wealthiest people. While starting a business might not be easy, anybody with an idea and a huge amount of fortitude can do it. You can even start a business without money, as long as you utilize the proper resources.
Writer and business owner, Anne-Lyse Wealth, founded DreamofLegacy.com to help millennials build wealth with purpose. She has also interviewed many unlikely millionaires.
Wealth writes, “I believe the first step to attaining wealth—at least for people who are not born into it—is much more personal than building millionaire habits…I would argue that changing your mindset or building a mindset conducive to wealth, is the first step to attaining it. This means believing that wealth is accessible to you and believing that you are worthy of wealth despite the systems designed to keep it from you. Without that mental drive, the other strategies are basically moot.”
2. Choose to InvestAs wonderful as having a business would be for building wealth, it shouldn’t be your only source of income. Effectively investing can be a great option for growing your wealth over time.
If investing initially sounds tedious or overwhelming, know that you are not alone. There has been a significant increase in the number of people, particularly millennials, who are choosing to save rather than invest. This is largely due to misconceptions surrounding investing and a lack of accurate education and guidance on the topic.
If you are looking for a low-risk place to start investing, while you are still learning, consider micro-investing. Business analyst Portia Antonia Alexis defines micro-investing as “the practice of putting away small sums of money toward long-term or short-term investment goals. Micro-investing doesn’t require the investor to make any significant lifestyle changes or learn new saving habits.”
3. Invest in YourselfWhile investing your money is important, investing in yourself is even more critical. Having money will do you no good if you lose yourself along the way.
Financial journalist and money expert, Miranda Marquit, says, “What’s your best asset? When asked this question, your thoughts might jump to your home or to a stock that’s performing particularly well right now. You might even say that the business you are building is your best asset.”
She continues, “While these assets can certainly be valuable, the best asset you own is yourself. When you take the time to invest in yourself, you are building an asset that can benefit you throughout your lifetime. As long as you continue investing in yourself, you will have better opportunities to make money and enjoy life more.”
No other investment will have as direct of an influence on your life. Educating yourself will be one of the most meaningful investments you will ever make. While university education is a fantastic way to learn more, it is not the only way. Reading relevant books and learning from the example of real-life people, will make all the difference in your wealth-building journey.