I want to explain something very simple.
Becoming wealthy has absolutely nothing to do with how much money you earn at your job. Your income is a tool to become wealthy. A high income alone does not mean you are wealthy. Wealth grows over time from the ability to save a portion of your income.
There are a lot of people who earn a lot of money and are NOT wealthy. They spend every penny and actually live paycheck to paycheck. One minor disruption can bring down their entire financial house. Things like:
- One missed quarterly bonus
- A big client walks
- Illness or injury
and it all falls apart.
If you have real wealth, you should be able to withstand any short term blip and the more wealthy you are the longer the blip you can survive. How long of a blip can you handle today?
Which leads me to my next question.
Are you really building wealth or just pretending?
People that are driving expensive cars,wearing fancy clothes, living in big houses but are not contributing to their retirement accounts or have nothing in the bank are all pretending.
For example:
- I have seen people who earn $300,000-$400,000 with zero in savings. Zilch. They just can’t stop spending. It’s always another excuse…These people feel that uncommitting to the expenses is a failure, a step back. But in reality it’s just a reallocation of resources!
- While I have seen others who have never topped $150,000, maxing out their retirement accounts. Saving for college and other long term goals. These people have believed on living less since the beginning. Even though they earn $150k they have always put away 10-30% of their income. Because of that they have built a lifestyle that costs around $100,000 and not $150,000 and that has made all the difference in their ability to build true wealth.
Can you start building true wealth and stop pretending?
-Jared
