We believe the path to the Wealthy Life is pretty simple and can be accomplished in four steps. To make this process easier to envision, we like to think of it as a journey from drowning in the ocean to building a life on land.
- Learn to Swim
- Put on a Lifejacket
- Get to Land
- Build Your Wealthy Life
Determining which step you should start with and the exact path you’ll take depends on your unique circumstances and values. Read on to learn the foundational principles and mindset necessary for your pursuit and what steps will work best for you!
Wealth vs Money
Money is not wealth. They’re very different, and understanding that difference is the key to this entire process.
What is Wealth?
Wealth is a fundamental, largely immaterial concept. If you have meaningful relationships, health, and the time and means to explore your passions, you’re wealthier than many.
When thinking of wealth, don’t just think of cars, food, shelter, clothing, gadgets and gismos. Think of traveling to exciting places, skills you want to learn, passions you want to explore, causes you want to invest in. Consider the people you want to spend time with, character traits you want to develop, and experiences you want to have.
Imagine you rub a lamp, and a genie pops out, but instead of telling you the standard rules, they give you a choice. They say, “you can either be limited to three wishes and wish for anything, or you can have unlimited wishes, but you can’t wish for money.”
Which would you choose? The answer is obvious. If you have an unlimited number of wishes, money is pointless.
What is Money?
So, if wealth is all about the material and immaterial things that make life enjoyable, what is money? To understand the answer, we need to discuss specialized society.
In case the term is a new one to you, “specialized societies” are people groups that have organized to allow individuals to focus their efforts on a narrow set of skills (called a trade) for the benefit of the community. One member of the group may do the farming for the rest, while another builds the houses, and another watches the children. This way, everyone doesn’t have to be an expert at everything.
Let’s say you’re a puzzle maker living in a specialized society. Any time you want to acquire something, you have to trade (barter) the wealth you have (puzzles) for the wealth you need (food, clothing, travel, etc.). Imagine paying for a flight to another city with puzzles. How would that even work? What if the local farmer who grows the food doesn’t like puzzles? How will you eat?
The solution is to agree to use something small and transportable as a go-between: money. Cash is nothing more than a representation of potential wealth. We trade the wealth we create for money, then trade that money for the wealth we consume. When you think about it, it’s a pretty elegant and simple solution.
The Problem with the Solution
But that solution has one major problem: it obscures and muddles what it means to trade and what exactly is being traded. It confuses what it means to be wealthy. Many think that businesses make money when, in reality, they don’t make anything at all. Businesses simply organize the wealth-creating efforts of their employees.
The employees trade their wealth (skills, time, energy, etc.) to the business in exchange for money. The business then sells the wealth created by the employees to the world’s people in exchange for more money. The business then uses that money to acquire more wealth – new employees, tools, property, etc.
Did you notice the business doesn’t create wealth? The people do. That means the ability to create wealth is in your hands – always has been. We want to help you unleash that ability.
Unleashing that ability is part of how we pursue the wealthy life. But, what exactly is the wealthy life? Only you can determine what the wealthy life is to you.
And the best part? Dreaming isn’t that hard to do.
All you have to do is block off some time – maybe an hour. Set the tone for some productive mental activity. Shut off the TV, put your phone on “do not disturb,” and get a nice drink. Go to a place where you can let your mind wander without being distracted by your surroundings. Think of what you want your future to look like, then write down everything that comes to mind.
Next, spend some time clarifying that dream. Then put it somewhere you’ll see it regularly. We all can create our futures, and keeping what you want at the front of your mind is a powerful boost. Keeping your dream in front of you will be your secret weapon, the secret sauce of your success. Keeping your vision in front of you will help you stay on course when times get tough.
And don’t forget to update your dream regularly. Your life will change, and the type of wealth you desire will change with too.
Let’s begin transitioning to things a little more tangible. We believe in a few guiding principles and like to think of them as a compass. These guiding truths will keep you on course as you pursue the wealthy life.
- Live in the present – Life is meant to be lived! Don’t fall into the trap of thinking you have to live like you’re in poverty today so you can be a millionaire someday. Sacrifice has its place, but you’ve got to let your hair down now and then. Enjoy the things you love, create the things your passionate about, and give to the causes you love.
- Prepare for the future – While living in the present is essential, you can’t sacrifice the future. Be sure to take the time to prepare for the known and unknown things ahead. Simply put, this is all about setting yourself up for success. This principle and the first are usually in tension, but the right kind of tension that makes you think about what matters.
- Choose what matters most – Speaking of what matters, there are so many empty things you can devote your time, energy, and resources to. We want to encourage you to instead focus on the things that matter most to you. We’ve found immaterial things are best. Things like quality time with loved ones, experiences you will never forget, or volunteering for a cause near to your heart.
- Give as much as possible – Finally, we believe that giving away what you have is a beautiful thing. Don’t get too distracted trying to come up with the perfect percentage or amount. Just start giving. Giving multiplies the good you’re able to do in the world and weakens money’s hold on you. And the less power money has over you, the wealthier you will be.
We’ve been learning how to pursue the Wealthy Life for some time and have made some mistakes along the way. When we decided to create this plan, we had some high criteria that we wanted to meet to help you avoid those same mistakes. We decided to make this plan.
- Flexible – We want to meet you right where you are. Everyone’s life and priorities are different, and we want this to feel like your plan, not ours. After all, it’s your plan.
- Simple – No 11 steps or financial degrees necessary.
- Actionable – If you aren’t moving toward the Wealthy Life, this plan isn’t doing its job.
We worked hard to ensure this plan met those values and believe it will help you pursue the Wealthy Life.
Ok, let’s do this.
Step 1: Learn to Swim
The average person can’t last much longer than a minute before feeling a strong urge to breathe. Go ahead, try. Like, really. Close your eyes and see how long you can last.
1 Mississippi… 2 Mississippi… 3 Mississippi…
Did you notice the longer you went without air, the harder it was to think of anything else?
Many people we talk to admit that this is how they feel about their finances. Like they’re always running out before they get their next paycheck – their next breath of air.
They feel like they’re always on the verge of drowning.
Maybe you’ve felt this same way with your money. You work hard, but as soon as you get a little ahead and start to take a deep breath, you get slammed with something unexpected.
The wave pushes you under the surface, and you’re back in the same place again, desperately trying to get your head above water.
This cycle may not kill you outright, but it will suffocate hope.
That’s why we believe in getting some buffer money in your bank account. $1,000 is a great starting point, but you may decide to go for more or less. Whatever amount you choose, make sure you give yourself a small buffer. You need that money to give you the space to take a few deep breaths. Think of this first step like learning to swim.
Step 2: Put on a Lifejacket
Living paycheck to paycheck is an unfortunate reality for many, and breaking that cycle is a huge step. We think of this second step like putting on a life jacket.
You can do many things to break the cycle, but it boils down to living below your means and planning for the future. Some people make that happen by budgeting. Others tend to be more free-spirited. Some spend less, while others resolve to make more.
However you decide to get there, you’ll know you’ve arrived once you’re at least one month ahead. When you’re paying for this month’s expenses with last month’s paycheck, you’ll be floating with a little more ease. You won’t have to work so hard to stay above water, and with your extra energy, you’ll be better able to start moving toward land.
Step 3: Get to Land
This step is where things get interesting – but like, in a fun way. You’ve learned the basics. Now you get to decide for yourself what you value – then act on it. The goal here is simple: pursue financial independence. We think of this step like getting to land.
The best part about reaching this step is you have more choices. There are three areas of focus, and you can do one at a time, focus on two, or even put a little toward all three at the same time. The choice is entirely up to you. You’re even allowed to change your mind as your life changes. Just make sure your plan works for you and is always getting you closer to financial independence.
Remove the Weight: Eliminate Debt
If freedom from debt is important to you, eliminate that debt! Debt weighs you down and makes you more susceptible to being pulled under when a storm comes. Removing that weight makes swimming toward land much easier.
Just keep in mind that without enough money in savings, you may have to go right back to debt if a large unexpected expense comes your way. Likewise, if you have less cash on hand, it’s harder to create or buy assets. Suppose you have the chance to start a business or buy a rental house. In that case, it’ll be more challenging (maybe even impossible) if you put all your money into eliminating debt.
Get a Life Raft: Increase Savings
Maybe safety and security are your highest values, or perhaps you have a large purchase coming like a house or a car. If that’s the case, you can choose to build up your savings higher than the initial $1,000. We think of this like getting a life raft. A life raft not only keeps you afloat when a storm comes, but it also makes carrying the weight of your debt more manageable. Even if your raft isn’t very fast, it’s stable. On top of that, having some cash allows you to take advantage of a money-making opportunity when it comes your way!
Remember, if you decide to put all your efforts into growing your cash stash while you have debt, you’ll pay more on your debt in interest. Additionally, choose to delay starting a business or investing in the stock market until you have robust savings. You won’t see the cash flow until later.
Get a Motorboat: Create and Acquire Assets
Learning what assets are and how to create or acquire them is possibly the most valuable thing you’ll learn in your life. Put simply, assets are wealth generators. They’re businesses, products, skills, and ideas. An asset is something that creates wealth, and in exchange for that wealth, people pay money.
If you’re ready to begin contributing to humanity’s collective wealth creation, creating and acquiring assets is how you make that happen. We like to think of this like a motorboat. Because the boat is doing most of the work for you, you’re able to get to land much faster!
Generally speaking, most people focus on assets when they have less debt and a comfortable amount of savings, but this isn’t a cookie-cutter plan for a cookie-cutter life. Some people we know prioritized assets early on, and it worked out well for them.
Step 4: Build Your Wealthy Life on Land
We believe life is wealthiest when you can create and consume what matters most without worrying about money.
That’s why we think of the pursuit of the Wealthy Life as a journey to land. Once you get to shore, the financial things you used to think and worry about disappear. Those needs are met on land.
You’re no longer worried about rations because food and water are abundant on land. The storms that used to pull you under and make you gasp for air aren’t scary anymore. You’ve got solid ground under your feet and a roof over your head.
On land, you can take that extra mental capacity to build and multiply all the parts of your life that matter most to you. You can give more than you’ve ever given. Create more of what you love than ever before and experience the things that matter most to you.
President Jimmy Carter said it like this “If you are more fortunate than others, it is better to build a longer table than a taller fence.”
Building your Wealthy Life means more time with the people you love, creating and experiencing the things that matter most. If that gets you excited, you understand what pursuing the Wealthy Life is all about.
Ready to join the pursuit?