Halloween just passed and it was once again a time for goblins and ghosts to scare us. But there’s something that can be even more scarier out there than skulls and witches… it’s entrenched (but wrong) beliefs about success.
Our beliefs about our own abilities both fuel and predict our success. In other words, if you imagine more for yourself, more is what you will get.
On the opposite side of that coin, if you imagine less, less will be what you undoubtedly receive.
One of the basic beliefs we carry about ourselves has to do with how much, or how little, control we believe we have in becoming successful. Some people believe the scary lie that success is random. Others think differently, that success is possible for anybody who will work hard.
Out of these two mindsets, which develop at an early age, comes a great deal of our behavior and relationship with success.
When I decided to become financially free, I didn’t know the first thing about the subject. I was a farm boy from a small town in Louisiana. I had never taken a course in finance. Plus, I didn’t know the first thing about investing!
But I had a great advantage. I was aware of a man who had created enormous wealth, a human wealth machine – a man who, at a very young age, achieved financial freedom. He became my virtual mentor and taught me everything I know.
In the years that have passed since, my wealth has multiplied many times over from following his simple advice. In today’s essay, I want to tell you some of the most important, and yet simplest, things I’ve learned about building wealth from Warren Buffett. I won’t tell you all of them… just a few of the principles.
Let’s begin with some of the scary lies about creating wealth and then the actual truth.
At one time or another, I’ve heard the following so-called “facts”:
The secret to becoming wealthy is to take big risks.
The average person can’t become wealthy. You need special knowledge or influential friends.
Demographics determines outcomes. If a person is born poor, they will stay poor.
Do any of these “truths” sound familiar?
If so, then the next list is for you. This is what I know – from my own experience – to really be true about creating wealth:
Truth No. 1
You’ll never become financially free unless you understand the fundamentals about saving, spending, and investing. There’s nothing in this world that’s worth the price of not knowing the basics of money. Yet, most people go thru life totally clueless about how to build wealth. Is it any surprise that we have a 99% and a 1%?
Truth No. 2
The single most important factor in wealth-building is the size of your investment capital. Investment capital is what you have left over each month after you’ve taken care of your necessary expenses. These are your seeds. Seeds to plant to earn more dollars. The more seeds you have to plant, the more dollars you will grow.
Truth No. 3
Building wealth is simple. It doesn’t require luck, genius, or special connections. As John Bogle wisely stated, “The secret is there are no secrets”. The truth behind how to build wealth is public knowledge, simple to understand, and nobody should get rich selling it to you.
In fact, it is so simple it can be explained in just two sentences…
1. Make more than you spend and invest the difference wisely.
2. Develop simple daily habits that result in wealth accumulation.
The only thing remaining is to take action… and that is where the problems occur.
Procrastination is the single biggest wealth killer. You plan on getting around to it someday. You know what you should do but there is always some other priority. The kids need braces, the car needs repair, the kitchen needs remodeling.
The reason so few people achieve wealth is because they don’t start adopting habits and take the necessary action that leads to wealth.
Habits are the reason average people become millionaires while lottery winners go broke.
They don’t earn the most. They aren’t the smartest. They don’t have any special training. They just have good money habits – simple.
The reason good money habits are essential is that money compounds. Small amounts saved and invested over long periods of time can create massive results. It is an easy path to wealth.
The formula for wealth is simple – spend less than you make and invest the difference wisely.
The only question remaining is whether or not a person will do what it takes. Will they actually do these simple steps to create financial freedom for themselves?
The only thing standing between someone and wealth is the willingness to act. Will you act today?
Be free. Nothing else is worth it.
P.S. Why aren’t you wealthy yet? It’s because of something you don’t know. Otherwise you’d already be rich. Isn’t it time to learn what you don’t know? Consider signing-up for my newsletter below, to help you build wealth faster.
P.S.S. Looking to make an overnight fortune? Don’t sign-up to receive my newsletter below. There’s no magic secret. Becoming financially free takes time and dedication. But learning professional-grade money skills can have a life changing effect. If you’re ready to put in the work and learn, I can show you how to achieve financial freedom faster than normal.
P.S.S.S. There’s nothing for sale on this blog or in my newsletter. That’s right. Unlike other sites who claim to help people achieve financial success, I’m not trying to sell you anything. In fact, I find it a little disgusting that some sites insist that you buy something before they teach you how to become rich. Here on my blog and in my newsletter, I just provide actionable advice for free. It’s my way to give back. What do you have to lose? Subscribe today.
Ready for more tips on how to achieve the free life? Check-out more articles from the blog archives below: