People often spend their entire careers chasing money in pursuit of a vaguely defined financial goal. After all, who doesn’t dream of being a billionaire like Amazon founder Jeff Bezos, or Tesla CEO Elon Musk?
Yet, along the way an odd thing happens — people often burn through some of their most valuable assets (time and energy) leaving little left to enjoy the fruits of their labor during the golden years.
If more people understand the true meaning of wealth, they might approach life in a much different way. In full disclosure, it took me a while to figure this out myself. To unpack this idea, let’s start with a simple question: What exactly is wealth and how do you build it?
So, What Is Wealth?
According to many economists, wealth is defined as an abundance of something that can be exchanged for an object of value in a transaction. In that light, when you think about wealth, nice possessions often come to mind (e.g., fancy televisions, exotic cars, boats, or expensive bottles of champagne.)
The truth is that these are material objects that anyone who has money can buy. All of the money on Wall Street cannot buy contentment. If you look up wealth in the thesaurus, you’ll find that its closest synonym is the word weal, which means a sound, healthy, or prosperous state.
When you are truly wealthy, you aren’t stressing about impressing others or paying off a massive mortgage or car loan. Instead, you’re able to do what you love, you’re healthy, and you have quality relationships.
If you spend most of your life working at a job that you don’t enjoy, there’s a good chance that you’re going to be deficient in the happiness, healthiness, and meaningful relationships categories.
Here are a few guidelines to consider if you want to be truly wealthy.
Time is Your Most Valuable Asset
Here’s a reality check: Your youth has an expiration date. Before you know it, you’re going to be old. Your friends, family, and pets are going to get old, too. And eventually, you’re all going to die.
Time is your most important asset, bar none. Time wealth is about maximizing time, living for yourself and your values, and squeezing the most out of the short amount that you have on this planet. The sooner you come to terms with this, the better — because the clock is ticking.
Don’t Take Your Health For Granted
The pandemic is highlighting the fact that health is a precious commodity. It’s also something that many people tend to neglect (myself included). The combination of sound health plus time is a life-changing combination that you simply can’t put a price tag on.
Too many people sacrifice their health in pursuit of wealth. There’s no point in retiring a millionaire if you have to wreck your body in the process and only have a few short years to enjoy the material wealth you’ve compiled.
Determine Your Higher Purpose
Back in psychology class, you may have learned about Abraham Maslow who taught about the five fundamental categories that determine human behavior.
At the bottom of Maslow’s pyramid are foundational needs like shelter and food. And at the top is something called self-actualization, or a higher purpose. Self-actualized people reach their full potential in life.
There’s a reason why self-actualization is at the top of the pyramid, and that’s because it’s the hardest thing to obtain and something that many people fail to achieve. If you’re worried about affording your mortgage payment, it’s hard to pursue your true calling.
Making smart decisions early in life positions you to maximize your time and health. As a result, you have a better chance of achieving your true potential. Your higher purpose is a very personal thing and one of your biggest treasures. Keep that in mind as you make your decisions.
The Link Between Money and Wealth
As you can see, money is a means to an end for wealth. It’s easy to get so caught up in the rat race that you lose sight of your time, your health, and your higher purpose.
Money can’t buy you happiness, and seeking it just to pad your hedge fund account and improve your net worth is a lonely journey.
However, money can provide a foundation for you to realize your true wealth, and it can also open doors to a richer and more fulfilling life. With that in mind, let’s take a look at some ways to build and acquire more financial wealth.
5 Tips On How To Save Money
These tips can help you reach your savings targets without breaking a sweat. Saving and budgeting can seem stressful at first, but having a fixed goal can actually be a source of calm.
It can help you visualize an exciting future in which you’ve bought your first house, started a family or even just splurged on something nice for yourself. So, if you’re wondering how to save money fast, here are our top suggestions on how to boost your bank balance quickly.
1. Learn to budget and understand your finances
Our most important tip for saving money fast is pretty simple: Learn to budget. If you’re in control of your budget, you’re in control of your finances. But where to start?
Before you can start saving money every month, you need to come to grips with your cash flow. This means understanding all of your incoming and outgoing revenue streams, including any debt repayments, monthly bills and savings contributions.
Here’s how to create a budget so you can start saving fast:
- Keep track of all of your finances over a 90-day period. This includes all of your income and expenditures.
- Compare your monthly income to your monthly expenditures to assess how much you’re currently managing to save, or how much you’re overspending each month.
- Separate your expenditures into fixed and variable costs. Your fixed costs are expenses that are typically difficult to adjust, such as your mortgage or rent, and utility bills. Your variable costs include more readily-adjustable expenditures such as groceries, entertainment and subscription services.
- Identify any variable costs that you can start cutting back on to increase how much you can put towards your savings goals each month.
- Assess your progress regularly and make adjustments if necessary. If this seems a little overwhelming, there are plenty of budgeting apps available that can help make sticking to your budget easier.
2. Get out of debt
Before you start saving, you’ll likely want to pay off any outstanding balances on your existing debts. The longer you delay paying off a debt, the larger it becomes. That’s because interest — the price you pay for borrowing money — continues to add up over time. If you put off paying your debts, the interest that accrues can wipe out any money you manage to save up.
To get out of debt quickly, consider using a budgeting method such as the 50/30/20 budget. Created by US senator Elizabeth Warren when she was a Harvard bankruptcy specialist, the 50/30/20 rule offers a simplified approach to getting out of debt.
3. Create a designated savings account
To save money fast, you need to separate the money you spend on your daily needs from the money you intend to save. This means setting up a designated savings account.
By doing so, you minimize the risk of you dipping into your savings funds to cover daily expenses. Instead, it encourages you to stick within your day-to-day budget while keeping your savings safe from temptation.
4. Automate your savings
If you have a fixed monthly income, consider automating your savings contributions each month. This means setting up an automated transfer from your daily spending account to your savings account each month. By automating your savings, you further reduce your chance of using these funds to cover your daily expenses.
5. Automate your bills
While we’re on the topic, it might also be worth automating your bill repayments. Companies frequently charge you late fees if you don’t pay them on time, so paying them before the due date will help you avoid any additional charges.
How To Build Wealth
Learn Time Management
The wealthiest and most successful people in the world may not always be in control over their schedule, but they almost always have control over their time.
They often wake up early, and somehow manage to fit in exercise, creative pursuits, and family time — while working hard and getting ahead in their career.
Since time is limited and your most important asset, it’s vital that you learn how to manage it. If you’re struggling with time management, there are a variety of online tools that can help.
Take Care of Yourself
You only have one body, and if you want to maximize wealth and live your best life, you have to take care of it. Health care is one of the biggest secrets to accumulating wealth.
You don’t have to go overboard or invest a ton of money to be healthier. The body has an amazing ability to heal itself and maintain homeostasis. Eat right, exercise often, get enough sleep, and maintain a healthy and positive mindset and you’ll be better off than most people.
That said, even if you’re the healthiest of all your friends, you should also make sure that your estate planning is in order. Sadly, unexpected tragedies occur every day to people who were not expecting them (e.g., car accidents and sudden health issues). It also never hurts to have adequate life insurance.
Keep On Learning
Make sure to fit some time into your busy schedule to learn and improve your personal situation. Read about finance, and look for ways to incorporate small changes into your lifestyle that could increase your household wealth down the line — like buying new stocks, cryptocurrencies, or investing in high yield savings accounts.
People who make the smartest investment decisions didn’t just get lucky. Consider spending less time watching TV or playing video games, and spending more time learning about investing and applying that knowledge to build financial wealth.
Travel While You Can
For sure, travel can be expensive. But it’s also an investment that can yield a lifetime of memories and possibilities. You’ll meet new people, form exciting connections, and see the world from a different perspective.
As you get older and busier with family and work obligations, it gets harder and harder to travel. So, get out there and see the world while you can. Many avid globetrotters utilize travel rewards to see the world for free (or close to it).
Your Network Is Priceless
There’s only so much you can do on your own. If you want to be successful and acquire more wealth, you’re going to need to team up with other people — and not just for professional reasons.
Seek out mentors and friends who offer positive ideas, encouragement, and companionship. By the numbers, most wealthy people have very strong networks around them to help with any goal or obstacle.
Fortunately, you don’t have to go very far to network these days. For example, LinkedIn and Facebook make it very easy to connect with others. You never know when you’ll meet the right person at the right time.
Can You Be Wealthy Without Valuable Material Possessions?
Being wealthy is a state of mind. It has no relevance to material things and everything to do with contentment and being safe. People with vast fortunes, such as Warren Buffett, elect to live modestly instead of spending their riches on luxuries.
It is perfectly acceptable if you do not have any items of high worth. Value the things you already have, particularly your health and your time, and proceed from there.
The Bottom Line
Ultimately, everyone has a different definition of wealth. To you, wealth may be having the freedom to go horseback riding in the country every morning. Or, it may be spending more time at home with your family.
Or working every day for a charitable cause. It all depends on your core wants and needs. The good news is that with some planning, hard work, and determination, you can achieve total wealth.
It doesn’t matter whether you are low income, middle class, or if you were born with a silver spoon. Spend some time thinking about what wealth means to you and look for ways to build a lifestyle that aligns with that vision.
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