Do you ever feel like building true wealth and financial freedom will never happen? Do you look at others who have achieved it and wonder how they got there? They seem so much further ahead of you, the right time has been missed, or you'll never catch up. It is easy to talk yourself out of even trying! Take the easy life, you've worked hard, and you don't need the hassle.
A key idea that holds us back is that we need to know exactly what our goal is, hustle, grind, and a life of wealth and riches awaits the lucky few. For the rest of us, we will end up hopelessly average! The problem with that myth is it is simply not true. Want to know why? Well, read on!
Let me offer you another perspective of how wealth building works in reality. The myth of the single path in your chosen area sometimes happens, and there are clear examples, e.g. Michael Jackson. But even people who are among the greatest of all time often did multiple things before settling in their lane. For example, Roger Federer put his success down to his balance through badminton, basketball and cricket.
The same is true of wealth building. A better analogy than a single road is a river basin. True wealth is built from multiple income streams that compound and build into a fast-flowing, unstoppable river. Eventually, the river, although made of water, can cut through great rocks forming expansive canyons. What started as small investments of time and money compound to build wealth fast, generating more and more money. The streams of wealth-building into a vast river become inevitable.
There's good news and bad news here. The bad news is that you often need to try multiple things. Your skills will not be finely honed at the beginning of the small streams that build wealth. You will need to fail and learn. This situation may not be easy, but your skills in different areas will grow. Once you have learned to master a small stream, you can automate it and build another until the multiple streams compound from the river basin into a fast, unstoppable river.
What is the best wealth building approach?
The internet is full of opinions on the best asset class or approach to take. You will build wealth beyond your wildest dreams if you follow the advertised approach. The problem is that most of these opinions are biased based on trying to sell a product or service.
If you have read this far, you will probably realise it is the wrong question. Perhaps we should ask what different streams we could try? What might work? Where do we need to improve our education?
Building wealth with an investment account, investing money in the stock market, and starting investing in real estate, digital assets or online education are all possible.
But if you are shouting at the screen, I don't have the money to do that; it is likely you are still in the mindset of the single path and not being far enough along that path to build wealth.
With enough time and education, building wealth in any of these areas is possible if you start small. It is not a case of the best one but rather where could you start and what you need to learn.
Build wealth with lots of micro streams
When starting out making additional money, likely, the phase of building the stream and when you start building wealth will be slow. Unfortunately, this starting phase is where most give up, feeling it is more worthwhile working for an hourly rate fixed in the single path myth.
But you know different, slowly building wealth using compounding and time to build micro streams and streams and then your wealth river. Eventually, you will be able to automate this and hire people who can dramatically impact your financial situation.
You will build a fast-flowing river that no object can stop as you build accumulated wealth. The wealthiest people build wealth fast by building multiple wealth streams.
Don't build wealth through one approach, e.g. stock market but build multiple sources of income
For most people, building wealth is not about making a lot of money. Instead, it's about cash flow. Investing and growing your cash flow is how you build wealth over time. However, there is more than one way to invest and grow your cash flow. You can do it through real estate, stocks, bonds, and other assets.
The key is to diversify your investments to avoid putting all your eggs in one basket. This way, if one investment goes bad, you'll still have others doing well. And as your cash flow grows, so will your wealth. So don't build wealth through just one approach. Instead, diversify your investments and focus on cash flow to create long-term wealth.
Building Wealth takes time
It's not something that happens overnight or even in a year or two. It takes a long-term commitment to invest and save, and it requires patience and discipline. We need to avoid the temptation of using getting rich quick schemes. Market conditions also play a role in how quickly wealth is built.
In general, it takes a long period to build wealth. However, there are ways to speed up the process. Investing extra money in stocks, real estate, or other assets can help grow your wealth more quickly. And, of course, the more money you have to invest, the faster your wealth will grow. But even with a small amount of money, if you're patient and disciplined, you can eventually build a significant amount of wealth.
The skills you need downstream are different from the skills you need at the start
When you first started investing, you were probably focused on the short-term goal of making as much money as possible. But as you get further downstream in your investment journey, your focus needs to shift to the long haul. That means taking a more holistic approach to your financial health rather than just looking at the bottom line.
To be successful in the long term, you need to develop different skills than you did at the start. You need to be able to identify opportunities, manage risk, and stay disciplined when it comes to your investing strategy. And while it can be difficult to make this shift, it's essential if you want to achieve your long-term financial goals.
It is easy to look at Richard Branson, Elon Musk or others and think you will never get there. But starting with the small micro streams and learning how to get yourself to the next level, then how to automate and move to the next stream is essential.
So what skills do you need at the start?
Don't judge yourself against others when trying to build wealth
It's easy to compare ourselves to others regarding financial success. We see our friends and neighbours driving nice cars and living in beautiful houses, and we can't help but wonder why we're not doing as well as they are. However, it's important to remember that financial success is relative. What may appear to be wealth from the outside may be a huge financial burden on the inside. So instead of judging yourself against others, focus on creating your financial plan. Determine what you need and want in life, and set realistic goals for yourself. Then, with a solid plan in place, you'll be well on your way to financial success - regardless of what anyone else is doing
You need to try, fail and learn
Building wealth is important for everyone, especially if they want to be successful in life. Without a plan, it is easy to make mistakes with your money that can have long-term consequences. For example, you may not save enough for retirement or overspend and accumulate debt. The only way to become good at financial planning is to try it, fail and learn from your mistakes. There is no perfect way to a financial plan, so you need to experiment and find what works best for you. The most important thing is to start now and keep learning as you go.
You need to try to develop different assets outside your normal comfort zone
Financial education is essential. It helps you understand financial concepts and develop your skills to make sound financial decisions. However, financial education is not just about learning how to save money. It is also about learning how to invest money wisely and protect yourself from financial risks. One way to become financially secure is to develop different types of assets. For example, you might have a savings account that earns interest, stocks that pay dividends, and a home that appreciates. By diversifying your assets, you can reduce your financial risks and help ensure a comfortable retirement. So, if you want to secure your financial future, don't be afraid to step outside your comfort zone and explore different asset types. There's more to financial success than just saving money
Actionable Steps:
- What is the one approach to building wealth you find most interesting? Could you write it down?
- What has stopped you from taking action to start building this asset? Could you write it down?
- In this one area, what skills would you need to take you to the level above where you are? Form a plan for how you will develop them
- Take action on this single area until you see growth and can automate it.
- Start thinking about building the next income stream only when you build some momentum in the first stream.
- Rinse. Repeat. The quicker you can do this this successfully, the stronger your river and financial future.
I hope this has offered a different perspective on building wealth and encouraged you to try new things, learn and try again. The path to wealth and success is never a single straight path but far more of a river basin that will eventually lead to an unstoppable fast-flowing river.
Good Luck on your journey!
Diarmaid
