When I first learned chess as a young child, I was never able to beat my father who had taught me the game. I just thought I sucked and would never be good. How does this relate to wealth?
Contrary to widespread opinion, you don’t need to have money to make money. After the first million, is it helpful in acquiring more wealth? You bet! But the greatest chess players were once beginners.
Why People are Broke
Whether it’s Dave Ramsey or Robert Kiyosaki, the reason people are not able to start the accumulation phase of wealth-building is due to consumer debt. Ramsey says most people have no investable income because they have car payments and furniture payments. Money the could be invested has someone else’s name on it before it’s even earned.
Kiyosaki, author of Rich Dad Poor Dad, says that too many would-be investors have borrowed money frivolously for “doodads.” In the beginning, investing starts with income from a job. Accumulation is always the first step toward acquiring wealth.
Your biggest wealth-building tool is your income. - Dave Ramsey Click To TweetSolution to Being Broke
Pay off all consumer debts using the debt snowball. Then you will have some investable income to start the accumulation process. Discipline (aka, delayed gratification) is essential in the accumulation phase. If you “want” something, save up and pay cash. Borrowing for “needs” is more acceptable than borrowing for wants.
Babies crawl before they walk and walk before they run. Investing is an infinite game. There is no defined end, but many broke people see wealth as the finish line. They see the summit, while ignoring the climb. There are no overnight successes. That is only a perception. This is the primary reason people think you gotta have money to make money.
Takeaway…
Your income is your biggest wealth-building tool. Don’t tie it up with consumer debt payments. If you do, you’ll never be able to start the accumulation phase of wealth-building.
As Always…
Thanks for reading! I hope this information provides food for thought. Remember that I am not a certified financial planner, a certified public accountant, a licensed real estate agent, etc. My content is for educational purposes. I am a math educator who happens to have a finance degree. Like they say, never take financial advice from a math teacher! (Do they really say that?)
But you should spend less than you earn, invest the difference, and stay out of debt!
I would so appreciate your sharing my content with anyone you feel could benefit. And if you would like a free exploratory conversation or just want to shoot the breeze about personal finances, call me and leave a message or send a text to 570-731-0425.