How to Build Wealth in 3 Simple Steps

How to Build WealthOne must first define what wealth is to them before they can learn how to build wealth. I’m going to go out on a limb here and assume that “wealth” to you includes money in some capacity, if not full capacity. Moving forward with that assumption, you’ll have to differentiate between two wealth building mindsets. Is wealth having a ton of money in the bank? This is an “accumulation” mindset. Or, is wealth never having to worry about money again? This is a “residual” mindset. Once you’ve decided that for yourself, you are now ready to learn how to build wealth.

How to Build Wealth, Step 1 – Stop doing what poor people do.

Per the Department of Health and Human Services, 95% of today’s retirees reach their retirement age either dead or “dead broke.” Let’s look at what this enormous poor sector of the population does and analyze how they end up where they do. First, they leave high school headed straight for college with the intent of landing a good job once they graduate. During their college years they rack up consumer debt and student loans. Once they graduate, they begin their “real” life in the hole. Because they weren’t taught in school how to get out of debt, let alone how to build wealth, they give up control of their entire financial well being. They give up control by working someone else’s business as their employee hoping to receive a pension. They give up control by entrusting someone else’s business to properly invest their money hoping to create a large nest egg. They give up control of their lives and hope for the best. They work, work, work, save, save, save and hope, hope, hope. This is how the “accumulation mindset” attempts to build wealth. That’s what 95% of the country does, best case scenario. If you do what they do, you too will get what they got. Nothing. Dramatic? Read 16 statistics about today’s retirees that thought they knew how to build wealth.

How to Build Wealth, Step 2 – Start doing what wealthy people do.

Don’t worry, 4% of our country’s retirees do actually reach financial independence. Not bad, right? But wait! Financial independence defined by that same Department of Health and Human Services is the ability to pay yourself a little over $3,000 per month. That’s hardly independence. 1% of today’s retirees, however, do retire wealthy. It is possible. They do know how to build wealth, and they do. So, how do they do it? 75% of that 1% built their wealth through business ownership and/or investing in real estate. That’s what a “residual mindset” does. But wait?! Starting a business is risky, right? Don’t 90% of all businesses fail within one year of start up? No, they don’t. The business failure rate that you’ve become so accustomed to hearing about at cocktail parties and around the water cooler is a myth. Well… isn’t real estate investing risky? “My brother-in-law lost his shirt in the last bubble burst!” you say? I hate to break it to you, your brother-in-law wasn’t a real estate investor, he was a gambler. Now gambling, that is risky! No argument there. Entrusting your life savings to a “financial planner,” that’s risky, too! If you want to know how to build wealth, you must do what the wealthy do. The reason business ownership and investing in real estate builds wealth is because the wealthy learn how and maintain control of their finances. When one is educated… educated with a real estate investing education… and in control, risk can be managed and virtually eliminated. Bold statement, eh? Never heard of such a thing? Not surprised.

How to Build Wealth, Step 3 – Manage and protect your assets.

Most people were raised in a household where building wealth consisted of sending your money to someone else to do it for you. True wealth building comes from learning how to get people to send you money and you build your wealth yourself. Knowledge is power! No, strike that. The right knowledge is power! No, not quite… strike that, too. The right knowledge is “potential” power. Only if that knowledge is acted on and implemented does one really obtain power. The wealthy invest in businesses, real estate and their financial education. If you want what the wealthy has, you must do what the wealthy does. Start here.

Comments

  1. hey,matt.
    i am wondering if your theory works for chinese market.
    waiting for your answers!
    thank you!

  2. hi matt,
    i recently filed a chapter 13 and am paying the trustee just over 200 a month. i had to file because i need to get my debt under control since i have 100k in student loan debt. i make 50k a year and realized that i dont want to work till i die. that though scares the hell out of me which is what brought me to your site. can u please give me some advice how i can try to create wealth when i am unable to get a loan

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