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Lasting Wealth – How to Become and Stay Wealthy

Wesley Snipes, MC Hammer, Nicolas Cage – They’ve all earned tens of millions or dollars, but somehow lost it all and were forced to file for bankruptcy. These celebrities figured out how to earn big money, but had no idea how to create lasting wealth and actually keep it.

We laugh at the celebrities that somehow can’t seem to hang onto millions of dollars, but to be honest, we aren’t much different. We talk about money all the time, but who of us really knows how to create lasting wealth?

We earn more than most of the world, but still go into debt. Our earnings grow each year, but we continue to live paycheck to paycheck… Lasting wealth is a mystery for many, but should it really be that much of an unknown? I don’t think so.

Lasting Wealth – 5 Keys to Becoming Wealthy

We’re all looking for that next monster stock movement or that brilliant app idea that will generate millions, but how many of those opportunities actually pan out? …not many. The wealth option that many of us consider – but has the least probability of panning out – is the infamous lottery. This is the master retirement plan for 34% of us. Pretty brilliant eh? Yeah, not so much.

lasting wealthWe all want to become wealthy, but our plans to create it are marvelously futile and very rarely pay out as we think they might.

For those of us that want to create lasting wealth, where should we start? The answer is simpler than you might think, but certainly not easy to execute. Take note and take action on the five actions for lasting wealth below:

1) Get Rid of Your Excuses

Many of us have something that I like to refer to as “excusitis” – the disease of having an excuse for everything. Here’s the basic summary of someone that has excusitis:

Why don’t you have a better job? — “My parents were poor, so my education wasn’t great.”

Why is your net worth so low? — “The economy is lousy, so my investments haven’t paid off.”

Why do you live paycheck to paycheck? — “Kids are expensive. If we didn’t have kids, we’d probably be millionaires.”

You might hear your voice in some of the responses above. The reasons certainly aren’t unreasonable, but reasonable or not, they’re holding you back from lasting wealth.

There are plenty of people who started out their lives with nothing, but are billionaires today:

  • Ralph Lauren
  • Starbucks’ Howard Schultz
  • Oprah Winfrey
  • Oracle’s Larry Ellison

If someone started with nothing and has developed a net worth of more than a billion dollars today, your excuses of not earning thousands start to sound pretty ridiculous. If you want lasting wealth, get rid of your excuses once and for all.

2) Get Started on SOMETHING – ANYTHING!

lasting wealthI moved back to Michigan five years ago and landed a job with one of the major furniture companies in the area. Within the first week, I met a guy that was about my age. We clicked pretty quickly. He talked about getting started on his MBA, developing a can’t-miss app, starting an investment website, and building a new home. Of those four things he planned to do, how many do you think he’s started? Absolutely none! He had plenty of aspirations, but hasn’t started any of them!

“A good start is half the battle.”

It’s pretty easy to dream and talk about what we’d like in life, but if we stay where we’re at and do nothing different, then we’re bound to never accomplish anything!

If you want to earn more money, work for that promotion, get a second job, or start a side-hustle. If you want to build up your retirement account, increase your contribution at work or start investing on your own. Whatever it is that you aspire to do, get started on it today. If you don’t start, then it absolutely will never happen for you.

3) Retrain Your Mind

A tree is a fabulous plant. It starts out very small and grows quite slowly for many years. The branches stay thin and the leaves remain small, but while it seems like not much is happening with this tree, the roots are growing rapidly – wide and deep they stretch, picking up all the nourishment they can. Then, once the root base is mature, the trunk leaps upward, the branches thicken, and the leaves grow larger than ever before. Once the roots grew healthy, the tree soon followed.

Your mind is like a tree.

lasting wealth

Of the population today, the majority have a mental tree that has either withered or has simply fallen over. They started investing late in life and have plunked it all in the stock market. Somehow they expect that this will be enough.

If you want lasting wealth, you need to start building your mental root system.

Read.

Grab every single personal finance book you can get your hands on. Take notes, compare the advice of various authors, develop a plan, and constantly think about your financial future. With this knowledge, your roots will grow. It may not seem like much is happening above the surface, but with your solid root base, your trunk and branches will soon become strong and produce more money than you thought was possible! 

If you want to create lasting wealth, then you’ll need to retrain your mind. And if you want to retrain your mind, you’ll need to put new information into it. Start reading today!

lasting wealth4) Short Term vs. Long Term

Some people put in the effort to understand personal finance, but they still can’t seem to get a handle on their emotions – specifically the difference between a short term gain and a long term gain.

Short Term Gains come in the form of a hot stock tip that pays out a few grand or a house flip that earns a solid five-figure paycheck. While these are nice gains that I’m sure everyone would enjoy, the earnings aren’t easily repeatable. The money comes in the short term, it’s spent on stuff like a car or a boat, and is soon lost to depreciation. Those that search for short term gains will never have lasting wealth.

Long Term Gains are the earnings of millionaires. Often referred to as passive income, long term gains can be had and reinvested easily to create yet another stream of long term gains. Then, as the author of “Save, Spend, Splurge” puts it, the wealthy make it a point not to realize their income. So, they continue to reinvest it for the long term.

They often do this with rental property, their businesses, and their dividends. Once they have money, they reinvest it and it grows steadily over the years, adding up to millions. If you want to create lasting wealth, you’ll want to develop long term gains.

5) Diversify

Finally, you must understand that no entity is safe from destruction. Small businesses fail, banks fail, even governments fail. If you have all your money tied up into one business, there’s a great chance that you’ll lose it. If you have all of your money sitting in one institution, you might have to kiss it goodbye someday. And, once you start to develop serious wealth, you may even want to diversify your money into another country because as America stands today (you have to admit, we’re on pretty shakey ground economically and politically)…these walls could easily fall within the next 100 years. The moment that you think it can’t happen, that’s when it happens.

To create lasting wealth, you’ll have to remember to diversify your money at every stage of the game. Put some into the stock market, put some into real estate, put some into precious metals, and put some more into your own business venture. If any of the walls come crumbling down on one of your income sources, you’ll be extremely glad that you decided to invest in the others!

Lasting Wealth – Go Get It

There aren’t too many people in this world that are willing to do what it takes to generate lasting wealth, but you know what? That just makes it easier for you and me!

  • The more people that are willing to throw their money away in rent, the more I earn with my rental properties.
  • The more people that are willing to buy new cars and boats on credit, the more the stock market continues to rise.
  • The more people that aren’t willing to do something on their own, the more business opportunities there are for me.

Lasting wealth is achievable. And not only can you create a healthy nest egg, you can create one that provides you with a paycheck for life! If you want to create financial happiness for yourself, then pursue lasting wealth.

Will you go after lasting wealth? What are you doing to achieve it?

Money

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.

4 Comments

  1. I really like the last part of this article. As long as people continue to spend in certain ways, you can make money off that spending. Pay attention though because spending habits might change over time and you need to be quick to adapt.

    • It’s kind of a crazy thought, but it’s completely true. If everyone behaved perfectly with their finances, it would be a lot more difficult to make money! Good point about the moving money though. You’ve always got to be aware when trends are changing and how it can have an impact on your finances.

  2. I think that learning to retrain your mind is one of the most powerful exercises that you can do. It has helped me get over fears of public speaking to the point of giving presentations to hundreds of people, it has gotten me to live a more fulfilling life on less, and it has gotten me to enjoy some things that are truly healthy for me that I didn’t like before. This was my favorite part of the article, but the other steps are all excellent recommendations as well.

    • It sure is powerful! I still need a bit more confidence when it comes to speaking, but I’m getting there!


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