The 3 Things To Build Wealth
The 3 Things To Build Wealth
By Steve Adcock
In December, I celebrated my two year anniversary of early retirement from full-time work. In 2016, I quit the rat race at 35 to pursue projects that I actually cared about (imagine that!).
Without the relatively comfortable full-time paycheck.
It’s been an amazing ride. I’ve learned a ton about freedom and what it really means to control every second of your day. Believe it or not, it’s not quite as cut-and-dry as many people believe.
I’ve written about my story a lot, and I’m as transparent as I can possibly be. We’re not your rags to riches story.
Both my wife and I enjoyed a solid upbringing as children. Neither of us struggled through college or to find a job. We both earned highly-marketable degrees and made good money in the technology sector.
In fact, we pulled down a combined $250,000 in our last years working.
We know how to build wealth, and those techniques enabled us to quit full-time work pretty damn early. We’re both in our 30s and we’re proud of what we’ve accomplished.
How did we manage to build so much wealth? It’s simple, though not necessarily easy. And, it generally takes a lot fo time. Let me explain.
How to build huge wealth in 2019
First, let’s set the record straight about high incomes.
If you believe that earning a big salary is the only way to build massive wealth, then you’re wrong.
Just. Plain. Wrong.
It makes us feel better to believe that we’ll never be able to retire early without a huge income, but that’s just not true. The truth is a high-income job often comes with a set of assumed requirements that keep high-income earners churning on the hamster wheel for years.
You might be surprised at how many high income earners still live paycheck to paycheck just to maintain their high income job.
The strategies that I’m about to talk about apply to anyone – with any level of income. Big incomes or small, building wealth ultimately comes down to a small set of insanely basic principles.
Principle #1: Invest Your Cash
Nobody ever got rich just by “saving money“. Those articles about how to save money by ordering water instead of a soft drink in restaurants? Yeah, that’s nonsense. That’s not how we build wealth.
Wealthy people build wealth by devoting years of their life to investing their cash in appreciating assets.
Wow. Okay, what does this mean? It means we’re not just putting our money in a bank. That only makes banks rich. Instead, we’re placing additional value on our cash by investing it in assets that gain value over time.
Historically, the stock market builds serious wealth for investors. This chart from Macro Trends shows how the Dow Jones has performed over the years. Over time, Wall Street investors tend to build wealth because their investments appreciate. They go up in value as this chart demonstrates.
Others, like Chad Carson, invest in real estate to build wealth. Real estate investors buy properties to rent to companies and/or families.
In whatever way you choose to save your money in 2019, investing your cash in appreciating assets builds wealth over time.
How much should you invest? There isn’t a one-size-fits-all approach.
I always encourage new investors to talk to a financial advisor to develop an investment strategy that works best for them. But if you’re looking for high-level advice:
If you don’t have an emergency fund, start one now. The immediate goal is to build up at least three months of living expenses to account for an unexpected job loss or health issue.
Take advantage of company-sponsored 401ks. Many companies match contributions made by their employees. This is free money. And, 401ks reduce your taxable income. Talk to your company about investment opportunities. They might even provide free financial advisor services.
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