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?
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.
I tend to look at wealth differently. 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 (I’m a huge fan of this term).
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.
How to Build Wealth
Keep a Budget
Without proper wealth management, you’ll quickly burn through your cash reserves and struggle to make ends meet. As a result, you’ll spend your best years chasing money instead of letting it grow and accumulate.
Keep a budget to monitor your cash flow and ensure that you’re bringing in more than you’re spending each month. Use the money that’s left over after you pay your bills to save and invest in the stock market.
Minimize Bad Debt
Debt is one of the top wealth killers and one of the largest contributors to wealth inequality.
First and foremost, debt is extremely stressful. If you fall into debt when you’re young, you’ll have to work twice as hard to get out of it and your health may suffer as a result.
What’s more, bad debt is going to cost you valuable time that could otherwise be spent doing things you enjoy. It’s also going to prevent you from investing money when you’re young. Simply put, bad debt can take years off your retirement.
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.
For example, Rescue Time sends you weekly reports that tell you if you are using your time wisely. It also has useful features like automatic time tracking and distraction blocking.
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).
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
I strongly recommend traveling while you’re young if you can swing it.
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.
Frequently Asked Questions
Can you build wealth while working minimum wage?
You certainly can, but it’s going to take a lot of sacrifice and hard work.
The biggest obstacle is living a lifestyle that correlates with your income. Many people don’t realize that if you have a well-paying job and you also have a ton of debt (e.g., student loans, car payments, and credit card payments) you’re essentially earning minimum wage because most of your paycheck is gone before you even collect it.
To avoid this fate, minimize your debt and stay within your budget. It means putting every penny to work for your financial future, rather than trying to impress your friends.
When you start to accumulate more money, resist the urge to spend it. Instead, put it away in the bank, or in your investment accounts so that your wealth can grow. At the same time, never stop developing your skillset so that you can elevate yourself to higher earning potential.
For example, suppose you work in a fast-food restaurant. There’s nothing stopping you from moving over the counter to management, and from management to a corporate position — or even from purchasing your own franchise. But no one is going to hand you those opportunities.
Is real estate a good way to build wealth?
Once again, time is one of the most valuable assets that you have. If you make a smart real estate investment today, it can provide a steady cash flow for many years to come. Then when it’s time to retire, you could be the owner of a property that’s fully paid off.
Of course, real estate can also be stressful if you make the wrong moves. Before you put any money down, make sure you know what you’re getting involved in and that you have a talented team of advisors to guide you along the way.
Can you be wealthy without valuable material possessions?
Being wealthy is a state of mind. It has nothing to do with possessions, and everything to do with well-being and security.
Some of the richest people in the world, like Warren Buffett, prefer to live simple lifestyles instead of spending all their money on lavish accessories.
So if you don’t have any valuable material possessions, that’s just fine. Cherish the possessions you already have — and most importantly, your health, and your time — and build up 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.
I encourage you to spend some time thinking about what wealth means to you and look for ways to build a lifestyle that aligns with that vision.
Here’s to building true wealth and living the life that you want!