GMR 148: The Path to Wealth
What does it take to build wealth? Is there more than one path to reaching this destination? In this episode, we discuss the two main approaches to building wealth and why one path is disproportionately more likely to produce significant wealth.
Show Notes
What is the best way to grow wealth?
Wealth is not the goal of life, we’re not pushing that your identity should be tied to money/wealth. However, wealth is a good thing, a resource that can help you do more of what you’re called/proposed and passionate to do.
Wealth with purpose is a good thing!
4 Principles of Purposeful Living:
Spend on Purpose
Save Before You Spend
Increase Your Financial Margin
Invest Wisely
Benefits of building a solid foundation for wealth
We tend to emphasize the budget, reducing expenses, and saving. These are vital if you want to build lasting wealth.
It teaches discipline.
Financial management skills - net worth statement - business financial statement.
Perseverance and overcoming through difficult seasons - you’ll encounter this throughout life, especially in the wealth-building stage.
Many people think that having a job is the safest lifestyle
You have little control over:
Your boss
Your industry
The owner of the company
You do have control over:
Your skills
Your time worked
Your relationships
The money you earn from a job
Wealth Basic Definition - an abundance of valuable possessions or money. The state of being rich; material prosperity.
Here’s a slightly different definition of wealth to help explain where we’re going in this episode: “Can I stop working and live the life I want, without losing my wealth?”
The end goal should not be to save a certain amount and then stop.
It’s not about “not running out of money.”
It’s about growth; personal, financial, life purpose.
Shifting Mindset … not everyone needs to shift to this model of wealth building, but everyone should be aware of it. The importance of owning assets and knowing this is an option in life is critical. If you don’t know, you’ll spend your whole life angry at the people who are doing this, when you actually have the same opportunities to learn and grow in this area.
Robert Kiyosaki - Cashflow Quadrant
ESBI
Employee - You have a job (time is money).
Self-Employed - You own a job (time is money).
Business Owner - You own a system (other people’s time increases your money).
Investor
You own investments.
Your investments grow on their own producing you more money (your income doesn’t depend on your work).