This is one of the time-honored principles throughout human civilization –yet very few people ever get to actualize it. Personal financial experts & coaches talk about it every day, many of the finance books written have it.
Just why is it that soo many people never get it in their lifetime? Is there something about it that makes many people never turn it into reality? Or could it be a myth?
Today we will explore this concept & answer why:
- The average person starts with an earning – few people are lucky to be born wealthy and have a big inheritance for that matter. Starting out with a salary or casual wages is good, but many get blinded to think it is the end in itself. No matter how big your salary may look, making this the end in itself can only give you at best the ‘average Joe’ status when it comes to money and wealth. By nature, employment is designed to earn profits for the owners not for the employee;
- The comfort zone trap – many people get comfortable with their salary and quickly get into the paid rat race trap. They start only thinking about a promotion that earns more money or a change of job to the next better-paying employer. The dream of financial freedom becomes secondary and all energy is expended chasing a salary increase or a bigger salary together;
- Most people dislike the sacrifice & discipline demanded of saving – many people know they need to save and invest. But this is not a walk in the pack. In economics, we call it delayed gratification, yet most people live for instant glory. For money to start working for you, it has to first be set aside and then invested. Saving and not following that money again for ‘eating’ requires a special type of discipline that many fail to master. Unfortunately, that is the only way unless you were born into a fortune;
- Growing wealth demands continual learning and self-improvement – to earn more, your worth must also increase. Continual improvement demands a life-long learning journey, mastering new skills and competencies; understanding the environment around you, and being able to perceive emerging opportunities better than others. Tragically, we live in a country and a world where only a very minority invest in reading and have made lifelong learning a lifestyle choice; and
- Money and wealth demand patience for it only grows over time – we live in the era of ‘the instant of things’. Instant coffee, instant pressure cookers, and microwaves. The philosophy of money and wealth has remained very traditional, if not archaic. While the opportunities today are many and the means different; the process of making and keeping money remains the same as those of the stone age; the discipline to keep and invest part of what you earn –period.
A bonus point is the lack of understanding of the problem of lifestyle inflation. Many people upgrade their lifestyle as soon as they get a salary or income increase. If you seek wealth, upgrade your saving immediately your salary or income increases, but lag or delay your lifestyle upgrade with 3-5 years if you must. Even then, upgrade your lifestyle with only a maximum of 30-35% after the lag time and deploy the rest into working for you.
It is tough, but it is very doable – a minority few get to hack this one; the reward is money only in the hands of these few minorities in any single country and around the world. You’ve got to choose to be among this minority.
Have a lovely week ahead.