John D. Rockefeller once said, “If your only goal is to become rich, you will never achieve it.” The thing about getting rich is that it can’t be pursued directly – just like success and happiness. If all you think about is getting rich, the odds are that once you make the money you will be unhappy.
There are some things about money you probably don’t know. But if you learn them, you’ll have a much better chance at building wealth.
1. Smart money is slow money
The world’s best money managers think slow before taking action. This is because if you want to make better money decisions, you need to take pauses. You may have seen movies like Wall Street where decisions and trades are made in just a matter of minutes but that’s not investing, it’s speculation. It takes time for the best investments to play out. They are not based on a single event or a single product. Take a lesson from Warren Buffett. He is slow to get in and even slower to get out. One of his best quotes is, “Our favorite holding period is forever.”
2. Money by itself is worthless
Money should never be an end in itself. It’s only valuable when it gets you something you want. Money touches many hands. You need to invest it, give it, or save it for a rainy day — assuming you don’t yet have money put aside. Another good way to use your money is to support a company or organization that’s especially meaningful to you. Money was meant to be exchanged, and not kept in one place. Don’t hoard it.
3. Building weath is boring
What we see on the Internet and on television is where someone had some kind of instant financial success story. The reason you see these stories is that they’re unusual. Watching a person earn tons of money over their lifetime is a bit like watching paint dry. There’s nothing exciting about it. The money is earned by a thousand moves, all of which are directed towards a long-term goal. In other words, you save money a little at a time. You invest it. Then, you receive dividends or income. You reinvest your proceeds and your earnings increase – year after year. There’s no drama and no shortcuts.
4. You must study money
Unless you’re a highly unusual person you have a limited attention span. Plus, there are only 24 hours in a day, and they can go by in a flash. If you want to become truly rich, you need to dedicate energy and time to the task. If you’re not interested in learning deeply about money, or if you don’t have time to study it, then you’ll have to automate the steps you’ll need to get there as much as possible. You need to learn the basics of those processes. One of the worst mistakes you can make is to automate a process before you really understand it. Big accidents can happen this way. Don’t press “go” until you’ve read all the fine print.
5. You’ll need to learn to say no
Sometimes, the best thing you can do is nothing. You’ll find yourself tempted by a lot of bright, shiny objects begging for your money. One of the biggest keys to financial success is to say no to almost all those opportunities. The only exception to this is when the investment aligns with your core values like investing in a business you believe in. The critical thing is to understand your truest goals in life, and then align your financial actions with them.
6. Money requires an encouraging environment
You’ve learned the basics, changed your financial habits, and chosen the things you want to support with your money. That’s all well and good but you’ll fail if the people who surround you don’t support your new financial life. They may actually try to tear down what you build up. They’re not terrible people. It’s just that some people hate to see others succeed. If you find yourself surrounded by a bunch of naysayers, you may need to clear the decks. Look for new friends who live life frugally and blow their money sparingly.
The point of becoming wealthy isn’t to magnify you. It’s to provide opportunities – to help someone you love, to contribute more to your favorite charities, or to invest more in your future.