Wealth is an abundance of valuable possessions or resources. Wealth is sustainable. Having money in your bank account doesn’t make you wealthy. Wealthy people have money, know how to make money, and know-how to manage money. So how does one become wealthy? What should we be doing or avoiding in our everyday life?
The Consumer mentality
We live in a consumer-driven society where we think that the more we consume, the better off we will be. The truth is that consumption satisfies immediate needs only. Tomorrow you will need to consume more. It’s a never-ending cycle of needs followed by consumption. Our excuse is that we have money and can afford it. The problem is that money can dry out quickly. Money is as valuable as what you choose to spend it on. What we need to think about is how to ensure that we don’t run out.
Like everything else, it starts by changing your mindset about consumerism. Except for necessity, try to spend your money on things that will have value after today.
The Owner mentality
Most of us aspire to be owners (business owners, homeowners). It gives you a sense of pride that you have something that is yours. Unfortunately, we sometimes think it’s only for the elite, and we can’t afford to be owners. That is a lie! You have to ease into ownership by starting with small assets. You might not have enough to buy a house, but you can buy stocks. The idea behind ownership is to have your assets working for you and not have to rely on your ability to work, to make a living.
What do you buy?
Simply put, you want to buy something that can make you money down the line. I am not saying that all your purchase should be money-making machines, but your big purchases should be. Don’t spend too much on depreciable assets like cars when all you need is to go from point A to point B. Also, never lease a car! EVER! If you are into cars, I’m sorry.
You can invest in starting your business, buying stocks, buying a rental house, etc. Every time you buy an item, ask yourself: is there a way to own this? Ownership will save you money in the long run. Ownership is a way to build wealth.
Now, look around your house and see (1) if what you have is yours, (2) if what you have has resale value, (3) if what you have is costing you. Is the couch paid off, or was it financed? If you were to sell that couch, how much will you get? Are you paying interest or lease? It helps you figure out where you can cut back and where to bump up.
For you to build wealth and have a legacy to leave to your loved ones, you need to start OWNING. Don’t just accumulate things; be intentional about what you buy. Be smart about how you use the money to generate money.
“As consumers, we have so much power to change the world by just being careful in what we buy.” Emma Watson
