Written by Growing wealth isn’t about quick wins or sudden gains; it’s about understanding the principles that guide long-term success. Here are eight key principles that will help you build and sustain wealth over time.
1. Extra Time and Money Need to Be Reinvested
We all get extra time and money at some points in our lives, but the key to building wealth is what we do with them. Consider the Uber driver who earns a little extra on the side, but instead of investing that money, he spends it on gadgets that will soon be outdated. The same pattern is common: when people earn more, they often spend more on lifestyle upgrades rather than putting that extra money to work for them.
To truly build wealth, you need to break that cycle. Instead of spending your extra earnings on fleeting pleasures, reinvest them in acquiring new skills, investing in the stock market, contributing to retirement accounts, or funding a new business venture. The fun of a new gadget fades quickly, but the returns from smart investments can last a lifetime.
2. You Can Skip Ahead, But You Still Have to Learn the Lessons From Each Step
Skipping steps can be tempting, especially when you’re eager to reach your financial goals. Take the story of Philip, who jumped straight into building a SaaS company, bypassing several foundational steps. He’s learning valuable lessons, but it’s taking longer and is more challenging than it would have been had he moved through the steps gradually.
The takeaway? Even if you skip ahead, you’ll still need to learn the lessons from each step. This might mean setting more realistic expectations for how long your journey will take and preparing yourself for the challenges that come with each stage.
3. Apply Your Existing Skills in a New Way to Build Wealth
Your existing skills are more valuable than you might think, especially when applied in new ways. Take Patrick, who used his construction skills not just to renovate his own home but also to turn a rundown garage into a profitable Airbnb rental. This move increased his monthly income by 50%, proving that applying your skills creatively can significantly boost your wealth.
Instead of chasing after new opportunities that require completely different skills, consider how you can leverage what you already know in new and profitable ways.
4. There’s a Difference Between Working for a Better Wage and Truly Building Wealth
Earning a higher wage is great, but it’s not the same as building wealth. Patrick’s example is telling: he could have quit his job to build tiny houses for others, earning a decent wage. But instead, he chose to continue building and renting out his properties, creating a steady stream of income that works for him even when he’s not actively working.
True wealth is built when your money and assets work for you, not just when you work for a higher paycheck. Focus on building income streams that don’t rely solely on your active labor.
5. Use an Earlier Rung on the Ladder to Fund the Next One
Moving up the wealth ladder often requires capital—something you might not have on hand when you need it most. That’s why it’s smart to use your existing income to fund your next move. Whether it’s working extra hours to save up or leveraging your current job to build savings, the money you earn now can be the stepping stone to your next big wealth-building venture.
In Patrick’s case, he used extra shifts as a bartender to fund his building materials, enabling him to take the next step up the wealth ladder.
6. Moving Between Ladders Often Means a Decrease in Income
It’s important to recognize that moving from one wealth-building strategy to another often means taking a step back financially—at least temporarily. When I transitioned from selling ebooks to running a software company, my income took a significant hit for several years. It wasn’t until five years later that I exceeded my previous income record.
This is a common experience for those shifting their focus to a new venture. The key is to plan for this dip and have a strategy to bridge the gap, such as maintaining a side project or saving aggressively beforehand.
7. Each Step Is Easier With an Audience
Building an audience isn’t just for celebrities or influencers; it’s a powerful tool for anyone looking to grow their wealth. By sharing your journey publicly, you invite others to support and cheer you on, which can make each step of your wealth-building journey a bit easier.
When I started ConvertKit, I shared my progress through The Web App Challenge. Even though I didn’t meet my initial revenue goal, the support and encouragement I received from my audience were invaluable. Whether you’re launching a product, starting a new business, or simply trying to save more, having an audience can provide the motivation and support you need to succeed.
8. It Takes Longer Than You Think, But the Results Can Be Incredible
Building wealth is a marathon, not a sprint. It often takes much longer than you expect, but the results can be life-changing. My friend’s grandmother, who started buying and renting out houses in her 60s, is a perfect example. She built a substantial income stream that not only supported her in retirement but also created a lasting legacy for her family.
The journey to wealth is filled with ups and downs, and it requires patience and perseverance. But if you stick with it and apply these principles, the results can be truly incredible.
—
These eight principles are your roadmap to growing wealth over time. By reinvesting your time and money, learning from each step, applying your skills creatively, distinguishing between higher wages and wealth, using early gains to fund future moves, preparing for income dips, building an audience, and embracing the long game, you’ll set yourself up for lasting financial success.
To deepen your understanding of wealth creation and how value-based thinking plays a crucial role in it, consider taking our course titled “The Science of Wealth” on upskillshare.com. For just ₹99, you’ll gain valuable insights and practical tools to start building wealth through informed decision-making and self-awareness. Join us and take the first step toward mastering the art of creating wealth!