Building wealth takes a lot of time. High incomes definitely help speed up the process, but believe it or not, we don’t all need to earn big money to build serious wealth.
To build wealth, it takes discipline and determination. It’s more of a thought process – or mind game, than anything else.
And, wealth very often comes from more than one source, too. If one source dries up, the others are there to pick up the slack. A simple point of [wealth] failure is one of those risks that wealthy people successfully avoid.
Let’s talk about the four keys to build wealth below.
Four Keys to Building Wealth
Key #1: Don’t just save your money; invest
Though high incomes alone won’t necessarily get you rich, increasing your salary can. But, a bigger salary only helps if you save and invest it.
Don’t fall into the trap of lifestyle inflation. Otherwise, you’ll wind up like so many high-income earners who live paycheck-to-paycheck. When you spend the majority of what you earn, your wealth doesn’t truly build.
How can you increase your income in 2019?
- Ask for a promotion or salary increase at work. However, understand that we aren’t all cut out for management positions!
- Change jobs. Throughout my career, a job change has always netted a 10% to 20% increase in salary.
- Go back to school or take weekend classes to develop a new skill. Use that new skill to boost your salary.
- Start a side hustle (outside of work). Side hustles help improve cash flow and could even turn into your full-time gig.
Key #2: Diversify your income sources
Multiple sources of income are how sustainable wealth is built. It’s not hinged on one single source always being available. Instead, several different avenues of income exist to ensure consistent and dependable cash flow over multiple years.
“That’s the biggest mistake people make,” Darius Foroux said. “They rely on one income stream. And even if you have a job, there is no excuse to only rely on your employer for 100% of the money you earn.”
Generate more money. Sell something online. Rent out your apartment on Airbnb and go live with your parents on those days. Provide value in exchange for money. Generate cash.
Then, invest it in assets. Buy real estate. Rent it out. But don’t take it too lightly.
Key #3: Believe that you can
This year (and for every year thereafter), believe that you can. Expect good things to happen, then get your butt off the couch and make it come true.
Pay special attention to the last part of the previous sentence. Yes, believing that you can is the first step, but beliefs alone won’t make you rich. Neither will dreams. Don’t let highly-paid inspirational speakers make you believe that dreaming big is the key to big success.
It might be a start. But, it’s only a small part of the process.
Impostor syndrome is a good example of what can happen when you don’t believe that you can. “Impostor Syndrome is a pervasive feeling of self-doubt, insecurity, or fraudulence despite often overwhelming evidence to the contrary,” writes Quick and Dirty Tips.
It strikes smart, successful individuals. It often rears its head after an especially notable accomplishment, like admission to a prestigious university, public acclaim, winning an award, or earning a promotion.
How depressing, but it’s a very real battle. It happens to a lot of us.
And, these feelings systematically murder our chances at success – success at work as well as at home. Our ability to focus on our goals gets tougher.
And, we won’t build much wealth because we are distracted by the belief that we’re inferior.
It sucks, so stop it.
Key #4: Ask a lot of questions
Asking questions has made a remarkable difference in my life.
The fact is building wealth and being “successful” often comes to those who ask for it.
It’s remarkable. In fact, about half of my promotions and raises throughout my working career in corporate America have come as a result of my asking.
Asking means you’re serious and confident. It shows your organization that you are a productive team player who wants to contribute more (or feels undervalued). Either way, it can be incredibly persuasive.
What do I mean by asking?
- At work, ask for opportunities for advancement
- At home, ask for ways to improve your quality of life
- Anywhere, ask for how you can help
However! Before you ask, be sure to understand the following tips.
Know what you want
Before asking for success, know what success means to you.
For example, do you really want a management position? If so, know what you’re getting yourself into – at least to the best of your ability. Picture yourself doing the job, not just enjoying the title. I fell into this trap, and trust me, it was a painful lesson!
Believe you’re one of the best and most capable people in the room.
Seriously, believe it. Those who exude confidence are natural leaders. It shows. Even if you’re wrong, the confidence to make a decision and pursue it full force is what separates followers from leaders.
Act like the person you want to be
If you want to be the leader, act like the leader. Don’t ask for a promotion into management and then continue doing what you’ve always done.
Take the initiative.