Microwaves

This lazy student mindset is behind many “get-rich-quick” schemes. During the gold rush, the only people who got rich were shovel sellers and mercantile proprietors. And times have not changed.

I’m sure you’ve seen the ads… “proven systems” for day-trading… no-money-down real estate… or the latest — cryptocurrencies.

Do you want to get rich, or do you want to build wealth? The truth is that building wealth is not done with a microwave mindset. The ability to delay gratification is what is required here, not a faster way to cook.

Think Crockpots

True wealth-building requires a crockpot mentality. Warren Buffett says not to invest in anything you don’t plan holding for at least five years. Systematically acquiring solid assets in a “long” position is how wealth is accumulated.

For regular folks, this means dollar-cost averaging in good stock market mutual funds or ETFs over long periods of time. It’s not sexy. In fact, it’s pretty boring. But it’s like the exceptional math students who just do their assignments. After 180 days of hard work, they’re viewed an overnight success!

Through the power of compound interest, any one can build wealth over a long period of time…

Planting corn

However, like my scheming students struggling to pass at the end of the year, some people may find themselves nearing the end of their working years without enough invested to retire.

'The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.' Proverbs 21:5 Click To Tweet

The ant who toiled during the spring and summer had plenty in the winter. The grasshopper who frolicked all spring and summer did not survive the winter.

Catch-up investing

The sooner we recognize a shortcoming, the more we can do to compensate. If you’re like me, you may be old enough to take advantage of the age-related “catch-up” provisions of your IRA’s or 401(k)’s.

People with children may not have been able to maximize their investments earlier on. They were raising children, paying college tuition, or maybe even caring for elderly parents.

But the IRS allows for larger contributions after a certain age to catch-up with larger investments. (It’s kinda like summer school for my students who missed the boat trying to hack the system.) Depending on the investment vehicle, people in the 4th quarter (age 55-65) can now take advantage of what may be the largest incomes of their working lives.

Bottom line?

Getting rich slow is tried and true. It’s like doing your daily assignments in math class. It’s not fun while you’re doing it, but it leads to a bountiful harvest. It’s how everyday millionaires amassed wealth.

And if you’re young, getting started now will improve your chances of building “legacy” wealth. I’ll save the deca-millionaire analysis for a future post.

Want to learn more about me? Watch my first Facebook Live this coming Saturday, Feb. 16, at noon at www.facebook.com/mdnoldy!