We all want to think we are better off at each stage of our lives. But most people don’t see this as wealth building. Considering that wealth is often equated with greed and selfishness, it’s very easy to understand why.
Think about this. Wikipedia defines wealth as a quantity of things, possessions, valuables or resources owned by someone. That’s a rather dry way to put it. But while the amount of wealth a person builds varies, it is still a natural outcome of living. This doesn’t only apply to money or appreciable assets either. We all acquire things which add to our wealth.
As such, everyone should to take steps for securing their own future and accept that wealth is an important part of that future. Life is tenuous and things that seem permanent in our lives can come apart rather quickly. A better way to see wealth, then, is building a personal estate to help secure your own future.
The core of any estate is all of the things a person owns, so we all build a personal estate during the course of our lives, and we all end with some level of wealth. That’s one reason it’s so important to know that the personal acquisitions we make in our lives will ultimately either build security into our estate or add burden into it.
It only makes sense that everyone should take a serious and personal approach to wealth building. The reasons for building wealth may vary by individual but common to all of us are:
- wealth gives us a dependable safety net in life
- wealth provides options and choices when making important life decisions
- wealth provides time to recover from unanticipated pitfalls
- wealth increases our security in the retirement years
This leads to the first basic truth for building wealth, which is to immediately begin to live below your means! As you learn to personalize the importance of wealth and your own reasons for building an estate, you must consistently use this truth as the starting point on your road map to success.
This first principle of estate building must be followed now and forever. Regardless of your current income, regardless of future changes to your income, and regardless of changes to your family status and size, living on less than you earn is required. The path called “spending less than you earn” is your personal road to estate building and is your safety net in life.
Unfortunately, living within your means isn’t accomplished without some pain. It requires tackling debt, a difficult task for many people. Controlling and eliminating debt, particularly consumer debt, is absolutely a necessary step toward living below your means. It must be done, pain or not, as nothing will tax your ability to save more than excessive debt.
Living on less than you earn has to be your cornerstone for building wealth and is the number one ingredient for ongoing wealth building. It allows you to grow a personal fund of dedicated money, which will be money set aside to be used as your primary tool for acquiring long-term assets.