Growing your wealth takes more than a paying job. There are many things you can do to build wealth and make more money, but what do you need to watch out for along the way?
I’ve made the costly mistake of wearing jeans and a Metallica t-shirt to the financial battlefield. And hear me on this – it can be a battlefield.
All kinds of people, monsters, animals, contraptions – in different shapes and forms – come after us. Some do us financial harm unintentionally.
Some are out to get us.
But the result is the same – you will either end up with more of your hard earned money, or less. We face a lot of money battles and skirmishes in life. My goal for you is to help you win the war.
The armor of money is yours for the taking; you only have to put it on.
1. The helmet of knowledge
We all have financial failures that are often traced back to: you don’t know, what you don’t know.
- My boss once told me to buy as much house as the bank would let me.
- When I was first learning about investing, I was taught buying and selling individual stocks was how to build wealth.
- Society tells us we need to buy all kinds of stuff to make us happy.
My parents taught me to save money. That’s it. Nothing about interest rates, loans (they didn’t have any), mortgages (they never owned a house), insurance, investing (my dad had a pension) or budgeting.
School doesn’t teach us about money either. For the vast majority of us, we learn money lessons the hard way – after the mistakes and our money has been the casualty.
However, if you’re reading this, you now have the knowledge to at least know to go out and get more knowledge. Read more. Listen more. Take seminars. Talk to people. Check out books from the library. Swap an hour of T.V. (unless it’s Star Trek) with reading for an hour a week.
You’ll be very hard-pressed to find someone that built wealth out of sheer luck.
But anyone can build wealth if they seek out the right knowledge that makes it possible.
2. The shield of protection
Your shield guards your wallet and purse against harm. Unfortunately, there are too many financial pied pipers out there that are sincere in their beliefs but are sincerely wrong.
There are even some people out there trying to call attention to themselves by claiming:
- 401(k)s are terrible places to put your money
- you should never buy a house
- rich people don’t use credit cards
- you should only buy rental property with 100% cash
- you should only buy rental property with 100% financing
But at some point, you must make choices with your money. Who should you believe?
A classic example is people who sell products or services on commissions vs. people who sell products or services for a flat-fee or fee-only.
Both camps will tell you why they are better than the other, and that the other camp isn’t to be trusted for whatever reasons.
And while I have an opinion on how to pay for services, who you choose to do business with has no impact on my finances or retirement.
Which is why I encourage people to do one thing – follow the money.
- Is a personal finance guru being paid for their opinion?
- Is a personal finance guru collecting huge endorsements for choosing one product or service over another?
- Is a personal finance guru trying to sell you something?
I’m a capitalist. I believe in making money. But before that, I believe in choice, honesty, and trust.
Don’t believe anything I or anyone else tells you about money without doing your own research.
Blindly following someone with a nice smile or who may have helped you in the past may lead you to retirement’s doorstep with tens or hundreds of thousands of dollars less than you could have otherwise had.
3. The sword of peace
Swords are for slaying those that would harm you, right?
You’ll find plenty of friendly faces on your journey to financial freedom. Most do not intend to do you harm:
- Friends, family, and co-workers
But many often do harm, and rob you of financial peace.
Maybe you’ve decided to start budgeting for the first time to control your money and break the paycheck-to-paycheck cycle. You get invited out to dinner this weekend, but it’s not in the budget.
What would you do?
Do you have the willpower to say no?
Is your financial future more important than a $50 night out? Because it’s not just the $50 night out. It’s the $50 night out this Friday, then next Tuesday, then your cousin’s birthday party, then that once in a lifetime event that everyone is going to be.
The money sucking opportunities are endless.
You can use your sword to cut overspending out of your life in exchange for a peaceful future. Or your financial future will die by a thousand cuts by your own hand.
Saying yes to something means saying no to something else. Every decision, every day, you will wield your sword. You get to choose to use it for yourself in defense of your money, or against yourself.
4. The boots of success
My friend Jordan and I were in Murren, Switzerland and hiked up the Shilthorn, a 4-mile, 3,500-foot climb. It was brutal for me and took about 4-hours. Some parts of the climb involved hand-over-hand climbing.
If you’ve ever been hiking, you often encounter a lot of terrains:
- Tree roots
- Water obstacles
Every hiker knows you don’t pack ten pairs of shoes to carry and change in every situation. You pick one pair of boots that will be the best for most situations.
Benjamin Graham (Warren Buffett’s mentor) said that
The investor’s chief problem – and even his worst enemy – is likely to be himself.
A single pair of boots will get you to where you want to go. But only if you believe you’ve picked the best boots and continue to wear them no matter the situation.
Most people panic when their decisions start to look wrong. You choose a solid investment plan, but your co-worker is bragging about how much better his investments are doing.
If you agree at the start of your journey the path you have chosen to get from Point A to Point B is a good plan, stick with your plan. Every path has ups and downs, and even some detours. A good plan you stick with over the long haul will nearly always do better than changing direction every year.
It’s hard to get to the top of the mountain if you keep changing which mountain to climb, which way to go up, or change boots every twenty minutes.
It’s much easier to get to the top of the mountain if we pick one route and follow it.
And it’s even easier to get to the top of the mountain if we’ve got a good suit of armor to protect us from others, and sometimes ourselves.
What battles are you fighting right now and how are you choosing to defend yourself?