But it takes more than just the desire to build wealth to actually do it. Like many other things in life, motivation can take us a long way but it helps to take some strategic, mindful actions in order to help us reach our money goals. Along those lines, there are plenty of things we can do!
While one could probably make an exhaustive list, here are 6 that can serve as a good starting point.
Be Honest With Yourself
In most situations, I tend to think that erring on the side of objectivity is the way to go. At least in terms of evaluating your own situation.
This can apply to many non-money situations, including health, relationships, and other areas of life. And yes, money is a prime example of where a realistic assessment helps. Don’t bury your head in the sand, look at how things really are!
I’m not saying you’re doing that, but some folks do this to varying degrees. I’ve done it too. For example, assuming things will just “work out”, or that things take care of themselves financially. Or, just assuming the best case scenario will occur (conversely, assuming the worst case scenario won’t happen). Most likely with many people, it’s simply a matter of being in denial about spending habits and capacity to retire in the future.
Just being honest with ourselves about our financial situation is a GREAT starting point for building wealth.
Build Marketable Skills
Now, I’m a huge believer in education! I’ve written before about how education can impact wealth, and as long as one is strongly considering ROI when deciding where to go for undergraduate studies or graduate school, the decision on whether or not to go to school isn’t much of a decision. Go get that education!
But, just getting a great formal education isn’t enough these days. I think we always have to be learning, as in every day. The rate of change in terms of technology and how it impacts the day-to-day structure of many jobs and professions seems to be accelerating. While this concept might not apply to all vocations, it sure seems like it applies to quite a few.
Thus, let’s be sure to really be sure to keep ourselves marketable with the right skills and experiences for today and for tomorrow. After all, the past is a sunk cost. Just as businesses are valued on future cash flows more than on what has been done in the past, we are retained and developed for what we can do for an employer or client in the future – not based on the value we delivered in the past.
Don’t Go on Career Autopilot
This goes back to building marketable skills in a way, but really it’s more than that. It means that we should take control of our own career and finances, and not look at it like we’re in some kind of program or on a career “treadmill” that will automatically take us where we want to go.
I’ve found that the folks that I know that have really experienced exceptional success were very mindful of what was going on around them. They had a good sense of how things were going, and how they could maneuver themselves to situations that worked for them. And these folks had both short-term and long-term career goals, along with a broader vision of career and life in general, to help guild them.
Do the Math In Terms of Savings
Know how much you will need to save each month, each year, etc – to make sure that you really know what you need to save in order to reach your financial goals. This might mean trying to track expenses, and becoming a bit of a data scientist when it come to your money. Fortunately, there are some very good free or low-cost options to help us do just that.
So it’s more that knowing how much, actually. It’s also knowing where you’re spending your money.
Hopefully, we know how much we’re making! That’s easy and more fun to think about, but the cash outflow part of it is very important too. We can make all we want, but if we aren’t saving enough for retirement and other important life needs, we won’t be building wealth either.
Let Time Be Your Ally
Compounding can be magical, if you give it time to work. We’ve all seen examples of how much better off we can be by giving our money time to grow. Here is a post I wrote on time value of money, as a refresher if you want to look at it.
I’m really glad I saved and invested when younger, though I also wish that I did a better job of it along the way. Save early. save often!
Be a Giver
Now, I’m not saying that giving away money indiscriminately is a good idea. Having discipline with spending, and being mindful about it (yes, that word mindful again!), is essential in my opinion!
That being said, even if we watch our money like a hawk, it’s good to “giving” in nature. At least, this is what I’ve observed based on my experience. It took me some time to figure this out, but when we give to others without direct expectation of anything coming back to us, good things often do come back. Sometimes, in spades.
Giving might, in some cases, be spending money. There could be some people or causes that could really use help. Or, you might just want to be nice and buy someone a gift or help our their kid buy buying girl scout cookies. It might even be helping others regularly with networking and job search activities. Whatever the case, I think that there is oftentimes some karma with money that seems to evolve. Be kind and interested in helping others, and you just might be helping yourself in the process without knowing it.
Okay, these are 6 actions to build wealth that I have come up with, and I know this is just a starting point.
What do you think of these suggestions? Do you actively engage in any or all of these?
Do you have any others to share?