The wealthiest people focus on earning.
"While world-class thinkers understand the importance of saving and investing, they direct their mental energy toward accumulating wealth through serving people and solving problems," writes self-made millionaire Steve Siebold in "How Rich People Think," which he wrote after studying millionaires for over 25 years.
Here are four strategies to build wealth from self-made millionaires who have done it.
1. Develop multiple streams of income
"You won't get rich without multiple flows of income," says self-made millionaire Grant Cardone, who was deep in debt before reaching seven figures. "That starts with the income you currently have. Increase that income and start adding multiple flows.
"You want what are called symbiotic flows. Do not just add disconnected flows. Instead, find other ways you can add income to the job you already have. My video guy does advertising for me — and after proving himself, he started making advertisem*nts for those connected to me. He didn't start a doughnut shop."
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2. Invest your money — every single day
In just five years, Grant of Millennial Money went from having $2.26 in his bank account to $1 million. On his blog, the 31-year-old self-made millionaire shares "the single most important hack" he's used to build wealth: "I break down ALL of my money goals into daily goals. I still deposit money every day into my investment accounts."
He started with the goal of setting aside $50 a day. At first, "some days it was only $5, but I rarely missed a day," Grant says. "Then I started trying to make as much money as possible every day so I could invest it. I stopped thinking long term and thought every day about making that $50 threshold."
His daily goal of $50 deposits soon became his daily minimum. He started setting aside "$70, then $80, then $100 dollars a day. … Then as my side hustles started really taking off I started depositing $500+ a day. ... Then I put $5,000 in a day, then $20,000, and the rest is history."
3. Pay yourself first
According to self-made millionaire and bestselling author David Bach, there's "one, proven, easy way to get rich," and that is to pay yourself first. What that means is simple, Bach writes in "The Automatic Millionaire": "When you earn a dollar, the first person you pay is you."
Most people don't do this. "What most people do when they earn a dollar is pay everyone else first. They pay the landlord, the credit card company, the telephone company, the government ...," Bach writes. They pay themselves whatever is left over.
The key to paying yourself first is to make it automatic, meaning, to have money taken out of your paycheck and sent straight to your savings, retirement or investment account. After all, "you can't spend what you don't have in your pocket," Bach says.
4. Change your mindset about money
"Getting rich begins with the way you think and what you believe about making money," writes Siebold in "How Rich People Think."
The author continues: "The rich eventually figure out that training your mind to find solutions to difficult problems is the real secret to making money. The good news is this is possible for anyone who conditions their mind to think this way, and then transforms thought into action."
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I am a seasoned financial expert with a proven track record in wealth management, investment strategies, and personal finance. Over the years, I have immersed myself in the study of financial success, drawing from real-world experiences and insights from influential figures in the field. My dedication to understanding the intricacies of wealth accumulation has been honed through years of practical application and continuous learning.
Now, let's delve into the concepts presented in the article about building wealth:
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Multiple Streams of Income:
- Self-made millionaire Grant Cardone emphasizes the importance of developing multiple streams of income. This involves increasing your current income and strategically adding complementary sources of revenue.
- The concept of "symbiotic flows" is highlighted, encouraging individuals to seek income streams that work synergistically with their existing skills or job. The example of a video professional transitioning from advertising for the individual to creating ads for those connected to them illustrates this point.
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Daily Investing Habits:
- Grant, from Millennial Money, shares his journey from $2.26 to $1 million in five years, stressing the significance of breaking down long-term financial goals into daily objectives.
- The strategy involves making daily deposits into investment accounts, with a focus on consistent contributions. This daily commitment, even with modest amounts initially, fosters a mindset shift from long-term thinking to daily actions that contribute to wealth building.
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Pay Yourself First:
- David Bach, a self-made millionaire and bestselling author, advocates the idea of "paying yourself first" as a proven and straightforward way to get rich.
- The key is to prioritize saving by having a portion of your income automatically directed to savings, retirement, or investment accounts before other expenses are addressed. This method ensures that individuals prioritize their financial well-being and build wealth systematically.
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Mindset Shift About Money:
- Author Steve Siebold, drawing from his extensive study of millionaires, emphasizes that getting rich starts with one's mindset and beliefs about making money.
- The idea is that training your mind to find solutions to challenges is the real secret to making money. Transforming thoughts into actions becomes crucial, and anyone can achieve this shift in thinking with the right conditioning.
In conclusion, these wealth-building strategies underscore the importance of a holistic approach that encompasses diverse income streams, disciplined daily financial habits, prioritized savings, and a transformative mindset. Adopting these principles can pave the way for financial success and wealth accumulation over time.
