When it comes to wealth, one of the biggest challenges that people face is that they simply don’t understand exactly what it is. Sure, people may be able to correctly identify it in some obvious instances such as with Bill Gates or Warren Buffett, but it’s also misidentified in looking at those who people most want to be like. Most people mistakenly believe that they want to be wealthy when they are not doing things that will make them wealthy. They’re only doing things that will make them more money.
Now I’m pretty sure that most of you reading this right now are a bit unsure of what I mean or where I’m even going with this, so let me explain. I’ve spent my entire career working with people to help them create, accumulate and pre- serve wealth. Simply put, when it comes to wealth, I help people to get it, grow it, and guard it. In doing this, I’ve helped people to overcome a number of obsta- cles that stand in the way of wealth. Per- haps the biggest obstacle is in not under- standing what wealth is all about.
Webster’s American Dictionary, College Edition, defines wealth as,
- A great quantity or store of money, property, or other riches.
- Plentiful amount; abundance: a wealth of imagery.
- Any or all things with monetary or ex- change value.
- Rich or valuable contents or produce.
- The state of being rich; prosperity; affluence.
If you’re like most people, this definition will not surprise you. It looks pretty much like you would have expected. So why would I contend that most people don’t understand it? Well, as with most things in life, the challenge comes in the application of the principle more than from the principle itself. Let me show you what I mean.
If you look at the definition of “wealth” listed above, you’ll notice that it doesn’t say anything about income. It doesn’t say anything about making a lot of money. It doesn’t say anything about any action whatsoever. It talks about a state of “being.” That’s far different from what most people equate with wealth or what it takes to be wealthy.
In my experience with working with people for nearly 20 years now on getting, growing, and guarding wealth, I’ve come to believe that people are far more concerned with making a lot of money than they are with becoming wealthy. I think this is a mistake.
My experience working with high-in- come individuals has taught me that there is no amount of money that you can’t outspend. I’m sure you may be thinking about that statement and saying to your- self, “maybe so, but I’d sure like to give it a try.” Well, you’re not alone in that sentiment at all. We’d all like to give it a shot at living the high life. And you know what? I’m all in favor of you being able to do it.
One of the biggest challenges that I face in working with clients is that they some- times misunderstand my philosophy and presume that I’m trying to tell them to live a life of extreme frugality where they hoard away all of their cash in an effort to build up enough to someday enjoy themselves. This couldn’t be further from the truth. I am all in favor of being able to live the life that you most want for yourself. I will say, however, that I do recommend to my clients that they exercise some strategic restraint and seriously think through their expenditures. I want you to have whatever it is that you most want, I just want you to be able to afford it.
This doesn’t mean that you deprive yourself of everything. It means that you set aside a certain portion of your income so that it can grow into wealth. If you don’t do that, you’ll never be wealthy. You may make great money for a long time and enjoy the rewards of that income,
but what are you going to do when the income stops? Most people don’t have a sufficient plan to answer that question. That’s where I come in. The sooner that this type of plan is implemented, the greater the probability of success.
As I often tell people, there is a simple formula to follow when it comes to your finances. That formula is this:
if → ≥ ← , then ↑ = ↓
Here’s the translation of the formula in plain language. If your OUTGO (→) is greater than (≥) your INCOME (←), then your UPKEEP (↑) will be your DOWN- FALL (↓). Simply put, if you’ve got more money going out in expenses than you’ve got coming in from your income, keeping up with these expenses will bring you down.
If we go back to our example of how most people view wealth, it seems like making great money in the form of a high income would enable us to accomplish the objectives stated in this formula. The reality, however, is that sooner or later, the in- come will slow down or stop altogether. That is, unless you have a plan for replacing that income. My best, brightest, and most successful clients recognize that while they’d like to believe that their skills and abilities will last forever, the truth is that they will someday no longer be able to do the things that produce their income today. For this reason, they formulate and follow a plan for long-term income and wealth-building that will last past the prime of their skills.
You see, when it comes to building wealth, it’s not about what you make. It’s about what you keep. If you don’t have a plan for building a business that is bigger than yourself or a plan for accumulating assets that become money-makers them- selves, you need to put one in place pron- to. That’s what I do. Through my educational training and consulting work, I
help people to formulate and follow a plan for how to build a life of real wealth. This enables them to achieve financial independence for themselves so that when the time comes when they can no longer work, or simply choose not to work, to generate the high income they’ve had in the past, they have a back-up plan for re- placing their income without missing a step. This is what real wealth is all about.
Even better, this is something that you can do for yourself. No matter where you might find yourself on the financial spectrum, you can implement this type of plan for yourself. All you need is the right plan with the right information. You can do it, as long as you have a plan. You can have the life that you’ve always dreamed of. You can have the freedom and financial independence to know that your money is working for you rather than you having to continue to work for your money. And that, my friends, is the true definition of wealth..