As I have mentioned before, the problem of how to become wealthy isn’t that you don’t know what to do, it’s that you aren’t doing it. The road to wealth can be found in three simple steps:
1. Start saving early
2. Spend less than you make (save a minimum of 10%).
3. Invest the money you don’t spend.
That’s it. No secret formulas or hidden gems. If you want to be rich, it’s as simple as that. Of course, there is some tweaking that you have to do. You can’t invest in any old thing, but even that isn’t difficult to figure out and you already know where you should invest the money (401k with matching funds, Roth IRA and stock index funds being the most obvious – see, you knew that one, too).
So the question begs, why aren’t you doing this? For a lot of people, it’s simply a lack of patience. Patience is a quality that if you don’t have can get you into a lot of financial trouble. Here are some of the ways that patience can help your finances:
1. It helps forgo instant gratification: One of the biggest problems in wealth creation is getting yourself into credit card debt. In many cases, this is simply an issue of wanting to buy things before you have the money to purchase them. By having the patience to wait until you actually have the money saved before you purchase things, you go a long way in helping yourself create wealth.
2. It helps you save: If you want to get a good price on a product, often you have to wait. The newest technologies will always be the most expensive, but if you can be patient and wait a while until these become more mainstream, they will become cheaper and you will save a lot of money. Being able to do this
is often the difference between having enough money at the will help ensure that at the end of the month you can save 10% of your take-home pay.
3. Patience helps avoid “get rich quick” schemes: If you don’t have the patience to build your wealth over time, you will likely try to build it quickly. Get rich quick schemes are not a very good way to build wealth. By being patient and understanding that most people build their wealth over a long period of time and not by winning the lottery, you can can the necessary steps to build a solid foundation to build wealth.
4. It helps you stay on your wealth-building plan: Part of building wealth is coming up with a plan. As mentioned earlier, a plan doesn’t have to be complicated, but it does take time and patience to implement it. By having the patience to plan your strategy over a long period of time and continue with it is an important aspect of creating wealth.
5. Patience helps you look long term: No matter how well laid out your wealth building plan is, there will be instances where it doesn’t go according to plan. Stock markets go up and down and when they go down you need to have the patience to realize that over the long term they will go up again. If you lack the patience and pull your money out every time a stock starts to fall, you will end up being a lot less wealthy than if you keep a long term and patient view of your investing.
It is certainly not easy to follow these steps and be patient in a society where instant gratification and making money quickly is glorified. Unfortunately, instant wealth is not how most people create it. If you want to be wealthy, one aspect of your life that you should spend time working on is your patience.