Wealth and riches may seem the same, but they are not. Morgen Housel explains in the psychology of money the difference between the two. To be rich is to have expensive things, while wealth is derived from the ability to buy expensive items.
He uses the example of buying an expensive car. When you see someone with an expensive car, they either have the money to buy it or earn enough to afford the payments. Wealth disentangles from income once you have enough to cover your basic needs.
When your basic needs are met, it is up to you what you do with your extra money. If you have a huge salary but have buried yourself in payments and you are one missed payment away from losing your car, you may be rich but far from wealthy.
Contrarily, if you have a modest income but manage to save – or even better, invest – a portion of it every month, you could be well on your way to wealth. These modest contributions will compound and grow exponentially over months and years.
The key word is eventually, especially if your money is invested in the stock market. Your savings may periodically decrease, but sound investments will always find their way back up over time. You must be patient and not pull them out – or worse, stop investing – at the first sign of trouble.
Below I will outline three steps you can take to help you become wealthy. This is not a get-rich-quick scheme; I will not make any specific investment advice. Instead, I will help you understand the daily habits you can make that will allow you to develop wealth over time.
Three steps to building wealth
As described in The Secret and The Science of Getting Rich, the law of attraction states: ask, and you shall receive what you believe in. The book The Secret is a bit kitschy for my liking, but its message is powerful. Take a deep, spiritual breath and let’s dive in.
Please have faith and embrace your spirituality because the law of attraction relies heavily on it. The faith I am talking about here is the one René Brown defines in The Gifts of Imperfection as:
“… a place of mystery where we find the courage to believe in what we cannot see.”
René Brown
She describes that faith has three features which will be our three steps:
- Thinking positively
- Appreciating what you have
- Accepting the difficulties
The law of attraction is based on this definition of faith; to use the law of attraction, you must have faith in it. Wealth is a mindset. As described above, you can become wealthy as soon as your income outpaces your expenses – using the power of time.
Step 1: Thinking positively
Whether you are asking consciously or unconsciously, your desires will be fulfilled – eventually. Make it a habit of being mindful of your thoughts. If you want money, start believing that you have money, and it will find a way to get to you. If you want a sexy body, visualize yourself having that sexy body, and it will come.
In The Attention Revolution B. Alan Wallace explains that the world we see is designed by what we pay attention to. The more time you spend thinking about something, positive or negative, the more you will bring that thing into your life.
Thinking about debt will bring you more debt. Thinking about negativity will bring you more negativity as you will be looking out for it. Humans have a negativity bias – we tend to look for negatives more than positives. So this habit will take some work.
This negativity bias kept us alive while we were cave people, but it is now detrimental to our well-being. Rather than thinking about your debt, think about your income; focus on the blessings in your life and start turning those negatives into positives.
Positively frame your thoughts. For example, thinking “I want more money” is optimistic and keeps you looking for opportunities to make more money. Conversely, thoughts like “I don’t have enough money” keep you focused on what you are missing out on, causing you to notice even more things you don’t have.
Robert Kiyosaki’s Rich Dad, Poor Dad, is full of wisdom on how to build wealth. The most important nugget of information in that book is that you should pay yourself first; decide how much you will save or invest and stick with it.
When you pay yourself first, you are thinking about wealth and will find creative ways to cover your bills. By paying yourself first, you are thinking about growth. If you pay yourself last, you are thinking about debt and inviting it into your life.
Step 2: Appreciate what you have.
Finding joy in the fallacy of consumerism will have you constantly grasping for more and being less satisfied. Joy comes from finding satisfaction in what you have rather than seeking what you want.
You can cultivate appreciation through daily meditation or by writing a gratitude journal. These simple habits will enlighten your days by helping you appreciate what you have.
There is a difference between joy and happiness; joy is active, while happiness is passive. Joy must be worked at and is not an endless stream of good times. It is derived from meaning, living according to your identity, appreciating your blessings and accepting the hard times. Meanwhile, happiness is the temporary positive feeling experienced when something good happens.
Anyone can have happy moments that make them smile and laugh. Still, most experiences follow the law of diminishing returns and become less enjoyable over time. This is what I describe as the fallacy of consumerism.
René Brown’s research has shown that to feel truly happy through joy, we must be vulnerable. When we defend ourselves against pain, we also fend off the possibility of joy.
We must learn to appreciate the good times while they are here and accept that they will pass. An inability to accept the difficulties of life is what prevents a lot of people from feeling fulfilled and accomplishing their goals.
Investments are an emotional rollercoaster. Those who want long-term gains need to take advantage of the compound effect, accept the pains of losses, and appreciate the wins. No matter what you do, you will periodically fail and get hurt; it is inevitable.
Step 3: Accept the difficulties.
Trying to avoid the hard times only makes them harder. As with taking an ice bath, we must accept that we will be uncomfortable and move on. By accepting the discomfort, we will quickly move on from the negative experience, become more fulfilled, as well as develop the patience and discipline required to build wealth.
A quote I love is by Thomas M. Sterners’ book The practicing mind is:
“The problem with patience and discipline is that it requires both of them to develop each of them.”
Thomas M. Sterner
The circular argument of this quote struck me when I first heard it; it is powerful in its simplicity. Building wealth takes patience to watch it grow slowly and the discipline to stick with your chosen path when times are hard.
The path to your goal won’t always be obvious; it will be full of obstacles trying to distract you from it. To succeed, you need to remember the first step, visualize what success will look like, and carry on. The stronger your vision, the easier it will be to keep moving forward and the more likely you will accomplish your goals.
Success is the product of repeated failures. Don’t be afraid to fail; learn from your failures. People get rich, but they build wealth. Getting rich is easy; all you need is a good idea, but building wealth is a slow and deliberate act.
As your coach, I can help you build the habits you need to make this dream a reality. Subscribe below to get your first session free, and let’s start discussing your possibilities.
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