8 ESSENTIAL STEPS TO BUILDING WEALTH STARTS NOW!
Building wealth takes time, so what are you waiting for?
In my opinion, there is a science to becoming rich and that’s by building wealth on your own terms and determination.
Wealth Creation begins with a desire for financial freedom whether it’s in 5 years or 50 years but at some point, saving has to start.
Some of the wealthiest people got their financial beginnings working minimum wage jobs and found reasons to save rather than spend.
The wealth you build today becomes a stepping stone for exciting adventures in the future and less stress without debt.
You’re Rich You Pay For It
I’m amazed at how many people assume that money and wealth mean that it was handed on a silver plater or that you should do more because you have more.
We’ve been on the top of that platform before since we are now debt-free with a net worth over a million dollars.
Just because you have money doesn’t mean you are the ones who have to dish it out when there is an emergency.
Saving Money and Building Wealth
A situation has come up on more than one occasion where we’ve been asked to fork over money because we’re rich.
This is what happens when you let people know how much money you have or if they find out, especially family.
The way I explained it was using an analogy of spending vs. saving and the need to have it now rather than later.
When you were off spending your money eating out, booking vacations, new clothes and creating debt we were building wealth.
In that time we found other ways to vacation for less, buy second-hand clothes and eat at home instead of paying double or triple what we can buy in groceries.
We also took every opportunity to earn extra money whether it be using coupons, focus groups, rewards points and a second job.
On top of all that I started this blog to earn extra income which has steadily increased over the years building my online wealth.
Spend Your Money Not Someone Else’s
Never tell people what to do with their money whether they have more than you or not.
So, just because we decided to take the frugal route in our 20’s and 30’s building wealth and you’ve been creating debt it’s our responsibility to step forward and help out financially.
That type of a wealth mindset is why someone gets into debt in the first place and most certainly has skewed views on expectations.
Now that we are into our 40’s and we plan to spend a bit more since we are debt-free which includes renovating our home.
It’s almost as if you get crushed by jealousy demons because you have what they don’t and it’s our fault.
Life doesn’t work that way I’m afraid.
Building wealth is your responsibility and how you handle it no matter what life has dealt you is your decision.
We are entitled to, aren’t we?
You did, but perhaps you took a different approach that didn’t increase your wealth but in fact, put you into debt.
My point here is that if building wealth is something that you really want then you need to start when you are young.
Mind Budgeting
The way to wealth takes effort which means you need to know what your money is doing at all times.
Not many young adults in their 20’s or even 30’s want to use a budget but without it, you’re not building wealth fast enough.
I only say that because I know from experience that had I used a budget I would have banked far more money than I did.
Budgeting was happening in my head which tends to be the norm for most people who care but not enough.
It’s far easier to look at your bank account to see how much money is in the savings account, pay the bills and then spend what is left.
In fact, it’s this type of simple mind budgeting (that’s what I call it) decreases opportunities for building wealth.
How to become wealthy?
I’m not an investing guru even though we have maxed out our TFSA, RRSP and have now opened a non-registered bank account however it has helped.
If building wealth is what you are looking for you have to start small unless you have big opportunities and money to back your adventures.
For the people reading this today that are in their 20’s and 30’s who are perhaps in school or just graduated you start by doing one thing.
- No More Debt
A mortgage may be in your future but that’s not the type of debt I’m talking about when it comes to building wealth from a starting point.
I did, however, buy my first house when I was 17 years old but back then and today are two different things.
The number of young adults coming out of school with massive OSAP loans and housing costs can become a financial setback.
Ideally, the first thing is to just stop creating debt and do the frugal lifestyle thing.
It may not be your ideal but if your wallet can’t support the lifestyle you think you deserve then you obviously shouldn’t pursue it.
This is when you will start creating debt which then puts building wealth on the back-burner.
Building Wealth By Focusing On Debt First
If you are in you’re 20’s focus on budgeting, spending less, building an emergency savings fund and paying off the debts you already have whether it be student loans, car loans or personal loans.
Once you’ve conquered those debts you can focus on building wealth starting with saving for a downpayment on a home, investing in your Tax-Free Savings Account and Registered Retirement Savings Plan.
I do want to mention for those of you out there with employers who have investment matching programs to please take advantage of them.
It’s free money, don’t miss that opportunity and if you are in debt and struggling to set that money aside, find a way.
You may have to take on a second job or earn extra cash to increase your money supply by working extra shifts.
The hard work you put in today will benefit you down the road, trust me.
Building Wealth In Your 20’s and 30’s
I’m going my personal experience here with building wealth only because that’s all I know and have successfully conquered my goals.
My goals were simple between the ages of 20 and 40 and they changed along the way as my wealth mindset grew.
That means I put effort into learning about the money I earned, saved and invested.
- To Become Debt Free
- Mortgage Free
- Max-out Investments
Your list of building wealth goals may be different because well, you’re not me.
Ideally, you’ll want to scribble your goals down on paper until you come up with realistic visions for your future.
If you’ve missed your opportunity for building wealth in your 20’s start in your 30’s and if you’ve skipped that start now.
Building Wealth – 20’s and 30’s
- Create Financial Goals
- Spend Less Money
- Save More Money
- No More Debt
- Pay Off Debts
- Invest Your Money
- Educate Yourself About Finance
- Understand You May Fail
From Millenial to Millionaire Personal Finance Coach David Lester has this important tip for you for wealth building.
“Even though you want to make sure you have different sources of income … to become a millionaire, you also have to make sure you watch your pennies,” Lester said. “Make sure that you are doing both. Making more money from different streams of income, and then also saving.”
The last one is important to understand because building wealth isn’t cut and dry and there will be bumps along the way.
I sold my last house in the UK to move to Canada and although I made money I lost money on the exchange rate.
There were also times where I had missed opportunities that could have made me more money.
We also endured investments that plummeted be we recouped that money in the long-term.
If you experience something doesn’t go as expected find a way to jump that hurdle instead of staying down.
Nothing we do in life is for certain when it comes to building wealth and even the wealthiest people fail.
I’d rather be living a stress-free, debt-free life without having to fish for excuses as to why I didn’t start building wealth when the opportunity was presented.
Discussion: What have you done to start building wealth? Leave me your comments below.
Net Worth Losses and Gains
May 2019
What happened to our money in May?
Hi Everyone,
Well, yet another case of easy come, easy go.
We made so much last month due to increases in the markets and just as we make some gains, the markets go back down and we lose some of what we made.
What are you going to do? It’s a waiting game with the investments and we’ve got quite some time to wait.
This doesn’t worry us, the investments will always be up and down. The key is to see the end result over a period of time.
We’ve had downs before, but they are always outweighed by the ups.
The other thing this month is our available cash didn’t change. I think this is the first time that’s happened.
It usually moves up/down but never static.
We shall see what happens this next coming month.
Understanding Net Worth
What DoesIndividual Net WorthMean?
Net Worth is a snapshot of your financial health sort of like a picture or debt to net assets. In simple terms, it’s atotal of the value of your assets minus your liabilities.
We credit the growth of our net worth due to patience, perseverance, using a monthly budget and not giving up.
Your numbers may go up and down but don’t let the numbers scare you rather understand why and move on.
If you would like to use our budget I offer a FREE downloadable budget which I created and that you can use at home just like we do.
I don’t charge for it because I want you to save money not spend more!
There are tonnes of other free printable lists offered at Canadian Budget Binder to help you achieve some of those financial goals and build your net worth.
Calculate Your net worth
Do you know how to calculate your own Net Worth?
We like to calculate our net worth every month so we know if we are still on track.
Some people calculate it yearly or quarterly but it’s up to you and how informed you want to stay.
Net Worth is only an estimate and not everyone uses the same type of figures to tally it up.
Some of you may not include vehicles like we do or leave out assets inside the home as we have.
You might be that person that believes that your house should be excluded.
It depends on what you want to calculate or what you can sell today and make money on for tomorrow.
Figuring out net worth is fairly easy as long as you know your personal numbers or monthly finances which means you need to do your homework.
Net Worth is simplyadding up all your assets(what you own) thentaking away your liabilities(what you owe) which will give you a net worth number.
Understanding your net worth will help you determine if you are on track to meeting or beating your personal financial goals.
Itdoesn’tget any easier than that.
How to Determine Net Worth?
Net Worth = Assets – Liabilities
Why not go ahead andcalculate your own using our Free Money saving ToolNet worth Calculator (Canadian Budget Binder 2012)
Financial numbers
Whenbudgetinganything is possible, we are proof of that although we still have a long way to go in our journey.
These are our numbers and our goals, not a means of comparison towards your own goals to others target goals.
We don’t care how much money others makeor if they have a high net worth or if it is lower than ours as it’snot a competition.
I hope our experiences will help guide you along your financial path working towards debt freedom.
Not everyone has the same path in life.
Some of you may have had to start over like I did or go to school a second time and now have OSAP loans to pay back.
Others may have divorced, lost money in the stock market or other investments, suffered job loss, fell ill or injured on the job and so on but you can’t let that stop you from achieving your financial goals.
Some of you may have been given trust funds, paid-for homes, paid educations or perks in life that give you a financial kick-start and that’s OK too.
Remember what I said,“It’s not about how much money you make, it’s how you save it”.
The only reason people accumulate wealth is that they know how to save or invest it wisely even if they did inherit money orwin the lottery.
The smallest improvements should mean big strides in working towards reaching your goals.
Sometimes we have to fail in order to learn and we’ve all been there.
Money can be an evil force for some people especially those who have a negative attitude towards their own financial situation.
I urge you to be optimistic and little by little with determination you too should see improvements if you want that to happen.
Canadian Budget Binder Net Worth Updates 2019
Click the links below to read our net worth updates for the year.
- December 2018 -(1.66%)
- January 2019 (+2.37)
- February and March 2019 (+2.15%)
- April 2019 (+2.63%)
That’s all for this month’s net worth update but please check-in at the beginning of July 2019 to see how we made out in June 2019 with our financial portfolio.
~Mr.CBB
