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3 Necessary Factors to Build Wealth

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Have you ever wanted to build wealth? If you had the choice, what type of retirement would you picture for yourself? One on the white beach sands of the Bahamas, or within the stained living room of your 300 sq ft apartment on the bad side of town? If any one of us were given these two choices, I’m sure we would all volunteer for the white sandy beaches!

So, what does it take to create this type of retirement for yourself? Money of course! Before we can find ourselves strolling the beaches of the Bahamas, we must first understand what it takes to build wealth.

The Factors to Build Wealth

I was at my friend’s house the other day and we started talking about what our perfect job would be like. Instead of sitting at a desk all day and staring at the sun through the tiny office windows, we decided that we’d like to have more flexibility with our work. If there were a job that we could do at any time, and anywhere, that would be the job for us.

Well, with my experience making money online through this blog, I immediately proposed the idea of starting some sort of online business. After all, when you run an online business, you can really do it from anywhere, just as long as there’s an internet connection. You could suddenly decide to hop on a plane to Las Vegas, New York, or even Australia, and you wouldn’t have to worry about leaving your job behind. In fact, you could probably even earn yourself a decent wage while traveling on the plane!

While I was growing excited about the idea of earning a living while traveling the globe, my friend quickly shot the idea down. While he liked the concept, he really didn’t have any experience with web design, Search Engine Optimization, or online marketing. It just seemed like too large of a leap.

At that moment, I realized that in order to build wealth, one needed to fulfill 3 variables of the equation. My friend only had 2 or the 3 and was missing one component, which is why he could not build wealth in the category of ‘Online Business’.

Wealth = Knowledge + Resources + Drive

1) Resources

To build wealth, one must have the resources to start an endeavor of some sort. In other words, to start a business, you’re going to need some capital to develop an online presence. And, if you’re going to sell a product, you’re going to need additional money to get your inventory started.

In addition to actual dollars and cents though, you must also have the resource of relationships. In today’s world, networking is vital to the success of any business. Without the help of others (whether they be employees, suppliers, or friends that help you spread the word of your new company), you’ll most likely not last very long in the business world. Without the appropriate resources, wealth cannot be built.

2) Drive

Wealth is not easily created. You can’t just wake up one morning and say, “I’m going to gain masses of wealth today” and find yourself sleeping on a bed stuffed with money that same night. It might take years before you even feel like you’re on the correct road for building wealth. There must be constant course correction and continued efforts along the way. In order to accomplish wealth, one must have persistence and drive to continually push forward even when things may look bleak.

3) Knowledge

This is the factor that my friend was missing. I believe that he had the drive and he most certainly had the appropriate resources, but he had absolutely no knowledge of online business. Therefore, the idea of wealth creation with this avenue was not going to work.

However, the beauty of this factor is that it’s flexible. Even though you may not have the knowledge today, you could always learn more about it tomorrow! My friend didn’t know the first thing about the web, but he could easily learn! After developing his skills by taking a class or learning from a friend, he could suddenly have the 3 components of wealth in that category! At this point, wealth certainly can be created.

Do you have the necessary factors to build wealth? What’s your plan?

Investing

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

14 Comments

  1. I am currently planning on paying off a lot of debt first and then will resume asset building. I wish to acquire more real estate and dividend paying stocks for passive income

    • I’m not sure if I’ve ever laid out my most recent plan on my site here, but it’s very similar to yours. I first plan on paying off my house, and then I’m going to start investing in a few rental properties. Hopefully the cash will come in pretty fast once I get my MBA (which hopefully comes with a promotion) so I can quickly pay for these investments.

  2. I am not an expert when it comes to my online business but I am learning more and more every day! Hopefully it all pays off down the road!

    • As long as you keep on gaining knowledge and increasing your resources (both monetarily and socially), you should continue to see greater and greater success!! Best of luck to you!

  3. I am only missing the knowledge part of the equation for my start up idea. Though I am happy to outsource that portion to someone who knows the field a little better than me. I’m lucky in that through my contacts, I have found some people knowledgeable in the field I want to enter and soon it will be all about drive.

    • That’s one thing I didn’t mention – outsourcing! Great point Jon! Thanks for the comment.

  4. I find the most difficult for most is the drive. This can be the key to you finding and using your resources and gaining the knowledge needed. Too often people start something and expect everything to be easy and happen overnight. My plan is to work harder, be smarter (so wont have to work as hard), buy and payoff our home and move to where my money can go further. Rental properties, and flipping homes are something I am looking to add as well as going online revenue.

    • Drive can be tough, especially if you don’t really have a passion for what you’re doing. The best bet is to do what you love and put your all into it. Those that make the most money aren’t necessarily in the highest paying fields, they are just the best at what they do and in turn, get paid well for it.

  5. I agree. I would almost include perseverance in with drive because even if you have all of the 3 above you have to be willing to fail, get up, continue on even uphill in the snow both ways.

    • Good point Noel. It’s one thing to have drive, but you’ve got to be in it for the long-term. Thanks for the comment! Glad you liked the article.

  6. Those are really necessary to build wealth. And, I do agree that it is very important to pay off your debt first, but never forsake investing in yourself.

    • Investing in yourself is incredibly important, but I would still stress paying cash for those improvements. Almost anyone can get another job to pay for their schooling. Heck, I’m doing it with this website! 😉


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