Building Wealth Isn't Rocket Science... Or Is It?

Updated: Feb 25, 2019

Recently I was at work when I overheard two of my coworkers talking about their personal finances. One was a woman in her thirties happily married with two kids and a third on the way. The other coworker was a young man in his mid twenties single. Interestingly enough both agreed on one thing, they lived month to month and struggled to make ends meet. I was intrigued by the subject of their conversation. It's not everyday people are willing to talk about their personal finances. In fact many see it as taboo, a subject that is damn near a mortal sin to discuss. Something I have never understood, and something I will probably never understand. But that's a discussion will save for another day.

I slowly drifted over and joined their conversation. The woman continued on with her venting. The part I found fascinating was her comment,"I use to make less in college, however I had my own place and had a savings". Why exactly is that I thought to myself? The woman not only had a duel income due to her and her husband both being employed, they paid less in taxes due to being married and her kids being dependents, she made about 2 to 3 times what she made from her previous job, and still they lived pay check to pay check failing to put part of their paycheck in a savings or investment account. After a few minutes of listening and asking her questions, the issue became clear. She fell into the modern day American trap. The, "I owe it to myself" mindset. The, "I'll save for retirement later" idea. The, "I have to have that." or "It's only forty dollars a month." thought process. And that's where the real issue lies. The real downfall to mankind's financial health.

In reality there are only two ways to build real wealth and achieve financial freedom in ones life (unless you inherit it or hit the lottery). The first option is spending less money and trimming the unnecessary expenses that keep you a financial slave living month to month. The second option is increasing your income either by switching jobs, receiving a raise, finding a side hustle, or achieving extra income through assets. And the beauty of it is when you combine these two together, you can begin to build some serious wealth quickly. Sure it may not happen over night, but I can promise you that if you continue to cut your financial expenses and increase your income, savings and investing the difference, you will become wealthy.

It's time to really take a deep look into your financial life. It's time for you to create a budget showing your true monthly income and your monthly expenses. Imagine if you just cut your cable provider and switched to Sling TV or Hulu TV which by the way streams live TV. You could potentially save anywhere from 50 to 100 dollars a month. That's nearly 600 to 1200 a year that you could be saving by switching to a different television streaming service. Imagine if you had just one less starbucks trip a week, skipping the pastry and viente hot white mocha before work, and enjoyed coffee from home or better yet, free coffee from work... (10 dollars a week x 52 weeks) could be a potential 520 dollars a year. Now imagine cutting a few other weekly expenses and the impact it could have on your financial savings.

As you continue to make those small sacrifices and you begin to free up some of your income, it's time for you to build a small emergency savings. The emergency savings will not only help serve as a safety net, but will help relieve some financial stress and reveal the progress you are beginning to make. After the emergency savings, it's time to shift that money towards paying off any and all debt you have. All of a sudden those 200 dollar a month minimum credit card payments or that 350 dollar a month car payment will begin to go down and disappear. Visualize all that financial stress off of your shoulders with all that money free waiting for you to tell it where to go. One 200 dollar a month credit card payment equals 2400 dollars a year which your missing out on. Imagine how much more amazing life would be. You could use that money to continue to pay off debt, build a savings account, invest in mutual funds, or even put it aside to take the family on that vacation to Hawaii you've always dreamed of. All with some sacrifices which in reality, you're not going to miss. You will slowly see your financial life begin to shift from living from month to month, to having anywhere from 5 to 10% left over, to the goal of 30-50% left over.

Beginning the path to building wealth isn't rocket science. It just takes some sacrifices and hard work. As you continue to live more and more frugally, trimming the unnecessary expenses, while continuing to work hard and potentially make more money through raises, overtime, a side hustle, etc., you will begin to build some serious wealth and become the next Wise Financial Man (or woman). Building Wealth Isn't Rocket Science! It's just some good old fashion self control, some sacrifices, and hard work!!!

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