The Three Stages of Building Wealth

The Three Stages of Building Wealth

At some point in our lives, whether we are 23 or 63, we all decide that there is a right time to start
thinking about the future. I believe that the quote “the future is just a sum of moments” couldn't be
truer when it comes to investing in our own financial wealth. If we look at the future (especially
retirement) as some distant land that we’ll get to when Elon Musk decides to make a functional rocket
that can transport us there, we’ll never be able to get to where we want to be, let alone purchase the
ticket!

Financial wellness requires us to be aware of our situation today; and then translate the sum of our
‘todays’ into what it may look like ‘tomorrow’.

Let’s look at how we can do that:

Building financial and wealth awareness is critical to obtaining present and future wellness. How do
we do that? We do that by starting with contentment. As a society, we’re pre-programmed from
childhood to want more, to want better and to stretch any means necessary to achieve those wants. The only issue is we’re never satisfied. The first journey to our wealth is to understand that we are already wealthy. We need to be happy with the financial situation we already have, and understand that we’re already equipped with everything we need to achieve future goals.

The second step to building wellness is the concept of net zero. Everyone knows when you owe
something, that’s called a liability. If you own something, that’s called an asset. If we continue to owe
money on the things we own, we will forever be at a net negative. One of the first steps to building
wealth is to create a chart containing how much you owe and then how much it’s worth. Separately, we
can record the things we do own and how much those things are worth. 

Here’s a simple example:

Now that we know our net worth, it’s time to consider how we can start gaining a net positive.

There is no secret to financial wellness. It requires a plan, the diligence to stick to that plan and
perseverance to weather the storm of curbing our spending habits and increasing our savings (or paying down debt). Not everything is merely a dollar for dollar trade off, though.

There are many ways we can utilize investing as a way to increase our method of paying debt off and
ultimately exponentially increasing our wealth. The third step to building our wealth is by investing
wisely in financial instruments that best fit our needs. This involves a proper education on financial
means and perhaps a financial adviser, all of which point back to a solid financial plan. Coincidentally,
planning for your future requires for you to do something today.

What are those steps?

1. Readjust your view on wealth – Are you content with where you are? Why not?
2. Start your education – Start reading. Simple Google searches like “build wealth”, “habits that
build wealth”, “build a wealth plan”, are all great starting areas
3. Start talking – take a class, talk to an adviser, talk to peers in your life that are on a similar track
to where you want to go
4. Jump in – The worst thing you can do is not act. There are small steps you can take each and
every day to make a better future for yourself and your loved ones

Are you ready to start building your future?

Would you like to have a more in-depth conversation for free? Send a message to tom@exploringalpha.com. No gimmicks, no sign ups, no payment.. nada. My goal is to help you get motivated to change your financial life.

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