How Do You Get To The Next Level In Obtaining Wealth?
Everybody wants to get rich quick, or hit the lottery. This is not a how to get rich article, but rather a practical look at how does one get from a good, healthy financial scenario to a picture of significant wealth?
First, let’s define wealthy. We’re not talking uber-rich. We’re talking having enough money to life the lifestyle you want, work as much as you want, and have a sustained retirement scenario. If your desired lifestyle is private jets and 150 ft. yachts, well, maybe you are talking uber-rich, but that is not what we are looking at here.
So, how do we become wealthy? Through career, through business, through budgeting, through investing? Let’s look at each of these.
Career & Salaries
I’ll be blunt, it’s very hard to become very wealthy through a career and/or salary. Most people, even very successful people, as their income rises over the years from 50k to 100k to 150k and even 200k, their lifestyle typically increases in tandem with the rise in income. Unless you make 200k and live a 50k lifestyle, it’s pretty tough to achieve significant wealth through just a salary.
With that said, the two career paths that can definitely achieve significant wealth is if you are in some type of sales position where the performance-based compensation potential is very high. For example, maybe you are selling yachts or million dollar homes? Wealth can definitely be obtained here.
Lastly, the corporate ladder route can result in serious wealth but it typically only for those that make it to the executive ranks of the company. I down play this scenario for two reasons. One, only a very small percentage of employees make it to this level. Second, this isn’t my dream since most Corporate Executives work around the clock. Their bank accounts of fat, but their lifestyle is not to be desired.
To sum this section up, for most of us, getting seriously wealthy from a salary is very tough.
Managing your expenses and income is a very vital component of your financial plan. It is crucial to any type of savings plan and is necessary for any level of financial health. Budgeting, however, won’t make you rich or wealthy by itself.
Learning how to budget and manage your money is important to do now at your current income levels. Then, as your income rises or expands, the more static you keep your spending the more wealth you will generate. Budgeting and financial management is key to ensuring your income growth outpaces your spending growth. This is an important thing to master now, and to hold to it as you move forward.
On to one of my favorite topics… investing. Can you get wealthy investing? Well, yes if you hit it big on a significant bet that you might take. In this world of diversification-focused investing, however, this is very unlikely to happen. While I believe it is possible to beat the market, and I attempt to do so, it is not what will make me wealthy in a way that will impact my lifestyle.
My investing is mostly focused on my long term savings and retirement money. If I achieve significant returns on this money, this will mostly just boost my savings (which is a great thing), but is not money I intend to have impact my lifestyle any time soon (perhaps, in retirement!). For most people, a focus on investing is fantastic but in most cases, it will only impact your savings, not your lifestyle.
With that said, as your income grows in your 20s, and if you are maxing out your retirement contributions and savings goals, yet you still have some money left over, you may want to start putting that money to work. What I mean by this is if you can start accumulating cash in an account that you want to attempt to help build wealth, this is a great goal. For example, I have started building cash for a potential purchase of some kind of asset. I have not determined what this asset would be but if there is a serious continued collapse of real estate, perhaps it is a rental property. Or, if the Dow plunges further and hits 5000 territory, perhaps it is some stock purchases. I would love to deploy this money to generate cash flow, which would definitely impact my income and my wealth building goals. I’m waiting patiently as I do not see anything nearly attractive enough for this money as of yet.
Starting your own business or developing income streams is the most likely way you can achieve significant wealth. This is off the radar of most people as most people are employee/job security focused type individuals. There is nothing wrong with this type of focus, but it does prevent you from obtaining significant wealth. However, if you’re reading my blog, you’re probably in the camp that is at least open to some type of entrepreneurial activity.
Learning skills necessary to start your own business should be one of your primary objectives right now. Whether it is business skills or the relationships you are building with potential future customers, you need to keep in mind your goal of having your own business. Starting your own business that you can eventually scale and generate income without your direct presence should be your #1 goal, assuming your desire is the best combination of wealth and lifestyle possible.
There are also plenty of what I like to call “21st Century Business Models” that definitely work and can be leveraged by 20-something, first-time entrepreneurs. More simply put, the internet and technology have allowed the process of launching a type of business to become very easy and require minimal startup money (which is crucial for a 20-something).
Because I believe that this is the best route to growing your income and wealth, my next post will be titled, The Four Steps To Launch an Online Business (not your typical “make money online” weak content). Also, make sure you get on the email list so you get all of the email content regarding income streams.
Your career, your budgeting, your investing and your aspiring entrepreneurial goals are all important and work together to reach your financial goals. Leverage your career to learn skills that will help you start your own business. Focus on managing your money and learning how to invest to maximize your current income and future income.
Most of all, keep focused on launching your own business. Even if it is a part-time, “on the side”, and even if it fails to ever make money, it will be a great learning experience for you. Lastly, look for more content on 20smoney.com to help you learn how to generate income streams and start your own business.