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Why Build Wealth?

Money is an interesting subject. On the one hand it’s just a made up concept, a worthless piece of paper that has no intrinsic value whatsoever. Neanderthals knew nothing about money and they probably were the better for it. But like it or not, in modern society, money is a tool that each of us uses every single day of our lives. If we have a surplus of it then we can enjoy life a bit more because we aren’t constantly trying to figure out how to pay the next bill. But if we have a shortage of money, or are deeply in debt then we’re either depressed or running around with our hair on fire in a constant state of stress trying to figure out how to keep the lights on or the car running.

So although money is literally worthless, having it makes our lives better and not having it makes them worse. That’s the bottom line.

Since money is such an important tool, why do only a small percentage of people understand how it works, how to earn more, how to save more, and how to multiply it? They certainly don’t teach that in the school systems, and I don’t know about you, but my parents weren’t talking about it at the dinner table either. It’s left up to us as individuals to sort it out, and quite frankly, most of us never quite figure it out—although a lot of people think they have.

Here’s a good self-test: if you are reliant on a paycheck to pay your bills every month then you haven’t figured out how money works.

A lot of people also have the mistaken idea that getting rich is somehow a function of luck, or inheritance, or a random event that happens to someone else. But that’s not what the research shows—not at all. Thomas Stanley, a PhD in business administration, spent his entire career studying millionaire’s and wrote a great book called The Millionaire Next Door. One of the key things he discovered was that 80% of millionaires didn’t inherit their wealth, they built it on their own, painstakingly and over a long period of time.

If becoming wealthy isn’t about inheritance or luck, then how the heck do we do it? Two words: financial education. Money is all math and philosophy, and once you understand how it works and you take sustained action month after month, year after year, wealth is almost inevitable. Once you figure out how to create a money machine for yourself it just cranks out more, and more, and more. But if you never make the investment in yourself to learn how to get your money right, then you’re probably just going to bounce around like a pinball from week to week, in a never-ending cycle of work, spend, broke. Work, spend, broke. Work, spend, broke. I’ve been there, so I know from experience that cycle is not a lot of fun.

So you need to make a decision, are you going to invest in yourself and start learning about how money works? Or are you going to spend the rest of your life living paycheck to paycheck in a constant state of money stress? You can continue to be someone who consumes all they earn, or you can be an investor that builds wealth, but you can’t be both.

One of these days you’re going to need to make this choice for yourself. But if you choose to remain ignorant about how money works, and spend all of your life-force trading time for consumer goods, then don’t complain about the 1% or the 10%. Most of them didn’t get lucky, they simply put the time in to figure out how to get their money right, and then they took action to make it happen.

So what are you doing to do?

This topic is covered in detail in my Lecture #101: Get Your Money Right.