You, like most others may believe that the key to wealth is a high-paying job. Am I right? You may have often heard people talk about how “if they land that big oil company job, they will be set for life.” While earning more money will certainly make it easier for you to amass assets, this is not the secret to wealth!
The true secret to wealth and increasing your net worth is to spend less than you make, and understanding the fundamental truth that income is not wealth! Did you get that? But how do you mean? you ask. Let’s tackle this.
What Wealth Is?
To be wealthy is to be able to generate money without labour. If you are a doctor or lawyer for example, you need to put in long hours after years of special training and higher education to get a job that will pay you high enough.
On the other hand, if you have a portfolio of private businesses, stocks in successful companies, bonds, real estate, patents, trademarks, and other cash generators, you can sit home all day and still be making a ton of money! Your ability to make money is not affected by sickness, disability, or being fired from a job; and should any of these happen to you, you will still be able to maintain your lifestyle! And unlike someone receiving a salary, wealth can’t fire you — you have to squander it. That is, you have to be utterly careless and spendthrift to lose it all.
So, How Should You Measure Wealth?
Don’t be fooled by big houses, cars, and expensive designer clothing! The level of your wealth should be measured by the length of time you can maintain your standard of living without an additional paycheck. Just imagine, if Aliko Dangote (who has several investments) simply drops everything and stops working today, could he ever be poor? But can you say the same about the CEO of Chevron whose only reliance is on his/her fat paycheck? If your answer is “a big fat No” then, you get it!
Another way to measure wealth is to ask yourself: Does this person have complete control over how they spend their day? Can they choose not to do whatever it is they are currently doing to do something else they really love or want to do? No matter how much money you make, unless your days are spent doing the things you enjoy so much that you would even pay to do them, and have control over your time, then you aren’t wealthy.
If you find the profession that gives you pure joy from doing it, and can be disciplined enough to manage the business side of it successfully, then you have a big advantage over everyone else. The reason this is so is because you will gladly work 18 hours a day not because you need to, nor because you want the latest Range, but because you love the process and product itself.
Stay glued to this page, there’s certainly more where this came from!
This post was adapted from thebalance.com