Pay. Yourself. First.
This is one of the most important concepts of how to build wealth often gets confused. I mean, isn’t every dollar you make technically a dollar that you are paying yourself? Actually — no.
Being wealthy, just to make sure we are on the same page does not mean having a Lamborghini, a mansion, or buying a bunch of stuff whenever you can and whenever you feel like it. Being wealthy is actually about time.
I assume you are either working or a student in school who will go on to work. Eventually, you will want to retire. Retiring is a way of saying that you’re wealthy enough that you no longer have to work. This is the modern-day idea and goal of someone who is wealthy. They own their time.
Rich vs. Wealthy
The difference between fake rich people and wealthy people is discipline. Wealthy people are very disciplined when it comes to purchasing stuff. They will buy a Lamborghini only if they have previously purchased an asset that is paying them. Before they buy anything with their actively earned cash, they save. They look for easy ways for their money to make money. This is the idea of paying yourself first.
You want to ensure that you are saving a portion of it for your future self for every dollar you make. From here, that wealth will accumulate and grow until it can one day replace your full-time income.
I’m not most proud of the fact that I made over 7 figures just last year. Instead, I’m most proud that I saved the majority of those profits and invested them. I’m already seeing dividends and growth. I’ve always had this attitude because I only have to work by choice, not because I have to.
Right now, I live in a van. My average living expense per month is around $1,500. Considering this, I am well past the modern-day monetary benchmark that one must hit before retiring. My real estate investments alone bring in enough to cover our cost of living. Could I just be done and retire? Sure! However, I’m 32 years old and I have bigger plans.