YW Blogcast 62 - Health, Wealth, and Freedom

Lottery winners have become collectively famous for their inability to manage their money upon winning. New lotto millionaires misspend and misuse, fail to invest, end up with less money than they started with. The same can be said for NFL athletes–men who beat up their bodies for wealth that frequently ends in bankruptcy or corruption.

Of course, anyone can spend their money poorly–the rules of proper investing cross all levels of wealth. Jason Hartman believes in the value of real estate in building wealth–but what then?

If you’re a student with a part-time job or a professional athlete with a ten year, $80 million contract, there are rules for managing your money, so take note.

Rules for acquiring wealth

Acquiring wealth isn’t easy–very few people strike it rich and many never experience the level of financial comfort they had once dreamed of. But it isn’t impossible–with some hard work, education, and careful investing everyone is capable of financial freedom.

It isn’t about your income

A hefty paycheck is great, certainly–but it isn’t the only factor that determines your ability to build wealth. People who have significant wealth have it because they’ve saved appropriately–no matter how much they’re bringing in. Focus less on the number on that bi-weekly check and more on what you’re doing with it.

And if you’re wisely managing your money and still struggling to save, look at alternative ways to make a couple of bucks. Real estate investing is a great way to passively make income, and collecting rent is a great way to build your personal fortune. While stocks and bonds can be a bit of a gamble, there are plenty of investment opportunities that promise high returns with little risk.

Look past the initial lack of sparkle

We get it–investing doesn’t initially seem as sexy as other ways of making money. You don’t immediately get a big car or a fancy new house. But everything in time. Good investors are patient and don’t spend a lot of time messing around with their investments. They invest in areas that make sense and not just those with a little flash. They spend time reading and researching. They show a level of patience that differentiates them from those that never quite build wealth.

Find the people who fail

It’s interesting to look at people who have done well with their money, but it doesn’t tell you all that much. It’s unlikely that your path to wealth will follow someone else’s very closely, so while it might be enjoyable to attempt to follow in the path of the elite, it is helpful in a limited way.

Instead, look for the people that have done a pretty bad job of managing their money. This way, you work toward avoiding bad choices. You make fewer mistakes because you’re aware of what those mistakes actually are–and you’re going out of your way to make sure they never happen to you. As a beginner, avoiding mistakes will be more beneficial than making amazing choices. Everything in time.

Rules for living with wealth

Once you’ve made a few great choices and acquired wealth, you’ve got to live with it. Don’t worry–it shouldn’t be that hard.

It’s more about the things you can’t see

Wanting to look rich is a poor reason to become wealthy. Resist the initial vanity that comes with money and work toward wealth that isn’t as visible. Lottery winners, athletes, and celebrities live extravagantly because they want to prove their success with expensive items, and many go bankrupt as a result. If you’ve got the stuff but not the cash, how real is your wealth?

Focus on building assets that will last a lifetime–and produce income.

It’s all about perspective

You’ve probably heard that it isn’t good to compare yourself to those around you–while this may be true in some areas of your life, it can be helpful in others. Because wealth in America is different from wealth in India is different from wealth in the UK, it can be useful to look at yourself in comparison with the people immediately around you.

So compare yourself, and then remember that it doesn’t actually matter. If you’re financially free according to your own standards, you’re doing just fine.

Rules for dying with wealth

Maybe you’ll spend your money and maybe you won’t before you pass on–but establishing a means of lifelong wealth is a pretty cool feeling. It requires planning, sure, but much of it relies on your feelings about wealth and even more is all about the attitude.

Learn to do things because YOU want to

Wealthy people think differently, so stop caring what other people are thinking about you. The general public is generally bad with money, so you’re operating on a whole different level. While many people are going for the “get rich quick” scheme, your wealth will take longer to builder. But it will last longer, too.

Remember to educate yourself

Investing isn’t always intuitive, so take the time to learn all you can about the things in which you wish to invest. Remember that education is a continuous, lifelong process. Don’t assume anything, seek advice, and think carefully about your decisions.

The world is an unpredictable place

We get it–a lot of things happen in this crazy world of ours. As such, it’s important to recognize this. Perhaps you’ll work very hard for your money and then lose it in the unpredictable stock market. Perhaps you’ll win the lottery. Jobs are lost, salaries increased, divorces finalized. Life is expensive and unpredictable.

But wise investors are as prepared for these events as one can be. They’re capable of surviving financial crisis because they’ve been smart with their money. Accept the inevitable, but prepare for it too.

By following these rules (and making up a few of your own as you go along) we know that you have the great potential to be successful. Remember that it is okay to make mistakes–as long as you learn from them–and it’s okay to celebrate your victories. Live financially free–and happy investing!