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Purchase Price Matters

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“If you think about the environment we’ve been in for the past 10 years, purchase price has not mattered.” Marc Rowan, CEO & Director, Apollo Global Management, Q4 2021 Earnings Call

The profit of an investment is often determined by the purchase price since “Price is what you pay; value is what you get”, quips billionaire investors Warren Buffett.

The price of a stock is determined by human characteristics and emotions, such as fear and greed, market tendencies and other factors. All of these things affect the price of a stock, sometimes to a large degree but rarely do they significantly affect its value.

“If you think about the [stock market] environment we’ve been in for the past 10 years, purchase price has not mattered”, said Marc Rowan, CEO & Director, Apollo Global Management. “The more risk you took, the more outrageous, generally the higher the pay off.”

Rowan and Apollo Global Management has consistently followed the investment philosophy that “purchase price matters”. Although, over the past decade in the equity stock markets, their strategy of “patient, value-oriented, disciplined approach to capital deployment” had not been consistently rewarded.

Share Price and Intrinsic Value

“Losing money can happen when you pay a price that doesn’t match the value you get. Look for opportunities to get more value at a lower price.”

Before purchasing a stock, it’s essential to compare the market price of a stock to its fair intrinsic value. When you find a company whose stock’s price is trading lower than the company’s intrinsic value would mark the opportune moment to purchase the company. Since value investors believe that an undervalued market priced stock will eventually climb to reach its fair, or intrinsic, value.

This is a process known as value investing, a type of investing that puts the utmost importance on the valuation of a company and uses various metrics to determine whether the valuation is low, high, or where it should be.

Some of the most important metrics include:

  • Price-to-Earnings Ratio (P/E Ratio). The P/E ratio compares the price of a stock to the company’s earnings per share (EPS).
  • Price-to-Sales Ratio (P/S Ratio). The P/S ratio compares the price of the stock to the annual sales, or revenue, generated by the company.
  • Price-to-Book-Value Ratio (P/B Ratio). Finally, the P/B ratio compares the price of the stock to the net value of assets owned by the company, divided by the number of outstanding shares.
  • Price-to-Free-Cash-Flow Ratio (P/FCF Ratio)

Before buying a stock, you must attempt to compute the intrinsic value of the company. If you’re following the value investing strategy, you’ll want to make sure the stocks you buy are undervalued compared to their peers.

Even when following other investing strategies, it’s important to avoid purchasing overvalued stocks because the market has a history of correcting overvaluations with price declines. Because in the long term investing, purchase price does matter.

Growth at a Reasonable Price (GARP)

Overvaluation will ultimately matter. In the short run, stock prices are based on hype and current news. Over the long term, valuations will ultimately matter when the hype declined and the market will correct the price.

When a stock is falling in price, it’s difficult to purchase a stock when it’s out of favor and widely being panned by the crowd.

References:

  1. https://www.apollo.com/~/media/Files/A/Apollo-V3/documents/apo-q421-earnings-call-transcript.pdf
  2. https://www.moneycrashers.com/factors-buying-stock-price-value/
  3. https://www.forbes.com/sites/forbesfinancecouncil/2018/01/04/the-important-differences-between-price-and-value/

Mindset, Discipline, Patience, Opportunity

  • It’s about process and being contrarian to current market sentiment and the crowd’s emotion
  • Why the hype: Optimistic vs. Pessimistic

When you purchase a stock, you are buying a Piece of a Company, not just a Ticker Symbol.

Every Investment is the Present Value of all Future Cash Flow.

Do you understand how the company makes its money (e.g., revenue, profit and free cash flow)

If the share price is surging; but the company’s corresponding fundamentals correlating and are skyrocketing.

Free Cash Flow – the true life blood for a company :

  1. Pay down debt
  2. Buy back stocks
  3. Pay shareholders’ dividends
  4. Acquisitions
  5. Organic growth

Start Early to Build Wealth

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The single most important thing you can do to build wealth is to start early. Getting started is more important than becoming a financial expert and the easiest way to manage your money is to take one small step at a time.

You, like most people, do not need a financial adviser to help you build wealth. Instead, you need to set up accounts at financial institutions, such as Fideltiy or Vanguard, automate the day-to-day money management (including bills, savings, investing and paying off debt). And, you need to know a few things to invest in, and then be patient and wait thirty years for your money to grow.

But, that’s not cool or exciting. Instead of listening to the noise of the financial entertainment media, instead you want your money to go where you want it to go in accordance with your goals and values. You want your money to grow automatically, in accounts that don’t nickel-and-dime you with excessive expenses and fees.

It’s essential to start today to learn about building wealth and take small steps to save, invest and manage your money. You don’t have to be a genius or financial expert to build wealth. Successful wealth building takes time, discipline and patience.

What do I want to do with my life–and how can I use my wealth to do it!

Investing early is the best thing you can do; ‘doing nothing’ ranks right up there with trying to drive a car without tires; it’s a bad idea and it won’t get you anywhere.

The single most important thing you can do to build wealth is to start early.

Here’s a great example of why investing early matters, that puts it in numbers:

  • If you invest $5,000 every year (which is $417/month) for 10 years, from age 25 to age 35 and then never invest again, you’d still have more money at retirement, than someone who starts at age 35 and invests $5,000 every year until they retire.
  • The 25 year old starter invests $55,000 and ends up with $615,000 (given an 8% annual return, which is close to the average return of the stock market per year). The 35 year old invests $130,000 and ends up with $431,000.

So, remember the adage “The best time to start building wealth is twenty years ago. The second best time is today.” You can save and invest modest amounts, like $20 a monty, and over time realize thousands of dollars in gains.

There are a lot of societal problems, but it’s important to focus on what you can control. Don’t be a passenger in life. It’s a lot more fun to be a captain of your own ship, even if you go off course a few dozen times. Building wealth does require some work. But, the benefits and rewards will surpass the effort.

Take a long term view. The economy grows and contracts in cycles ( business cycle). Fear is no excuse to do nothing with your money. You cam automate your saving and investing, thus you can continue to save and invest whiles others respond to emotions of fear.

Investing for average stock market returns (8% to 9%) is great since most retail and so call smart money fail to beat the average returns of the stock market. Moreover, theses investors tend to do the things that guarantee their failure: trade frequently, make outlandish investments, incur high taxes and pay unnecessary fees. The single most important factor to building wealth is getting started.

The challenges and opportunities with building wealth, and the corresponding solution, are you. Your mindset, behaviors and actions are the number one problem.

  1. You’re the only one responsible for your financial problems.
  2. Know how much money you have coming in and then automatically direct it where you want it to end up.
  3. It’s essential to start early and to start investing today, even if it’s just $1.

References:

  1. https://fourminutebooks.com/i-will-teach-you-to-be-rich-summary/

Failure has to be part of Growth

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Failure has to be part of growth.

“As a company grows, everything needs to scale, including the size of your failed experiments. If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle,” Jeff Bezos, founder of Amazon wrote in his 2018 annual letter to shareholders.

This tolerance for failure is deeply ingrained in Amazon’s culture. It’s a point Bezos has made every year since the very first Amazon shareholder letter in 1997.

“We will continue to measure our programs and the effectiveness of our investments analytically, to jettison those that do not provide acceptable returns, and to step up our investment in those that work best. We will continue to learn from both our successes and our failures.”

References:

  1. https://www.cnbc.com/2020/05/22/jeff-bezos-why-you-cant-feel-bad-about-failure.html
  2. https://www.businessinsider.com/how-amazon-ceo-jeff-bezos-thinks-about-failure-2016-5

The Tremendous Power of Thoughts – You are What You Think About

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“Our life is what our thoughts make it.” Roman Emperor Marcus Aurelius

It’s vitally important what you think since your mindset and thoughts makes you what you are today and will become in the future.

Writer Napoleon Hill wrote “the biggest problem [or opportunity] you and I have to deal with is choosing the right thoughts.”

Since, your mindset and thinking influences your behavior. You behavior influence your actions. Your actions influence your outcome. Your outcome determines how successful and happy your future will be.

So, be careful of your thoughts, what you feed your mind and how you think because it’s going to affect your behaviors and actions–which will affect you happiness and success in the future.

Hope and a positive mindset

Individuals must master their mindset in order to navigate the opportunities and challenges successfully.

In general we get what we expect in life. Norman Cousins remarked, “The main trouble with despair is that it is self-fulfilling. People who fear the worst tend to invite it. Heads that are down can’t scan the horizon for new openings. Bursts of energy do not spring from a spirit of defeat. Ultimately, helplessness leads to hopelessness.”

If your expectations for life are negative, you end up experiencing a lot of negatives. And those negatives are compounded and become especially painful, because negative expectations cause a person not to learn from their losses.

But, you can change your thinking from a negative mindset, in which you feel hopeless, don’t learn from your losses, and are tempted to give up, to a positive mindset, in which you believe things can get better, you learn from your mistakes, and you never quit.

You must renew your hope, change your thinking for the better, and believe that good things can and will happen to you. Doing these things can literally change your life.

Dr. John Maxwell says that if there is hope in the future, there is power in the present. The reason is simple: Hope in the future has a dramatic impact on your thinking today. Your thinking today determines your performance today, and your performance today has a direct bearing on your future.

There is a tale of a salesperson who went to a remote region of the world to sell shoes and reported back to his company that it was impossible to sell shoes there because nobody wore them. His replacement reported back that it was the most exciting market he had ever seen because nobody had shoes.

One salesperson had a positive and hopeful mindset, the other had a negative mindset and no hope. Without hope and the right mindset, there will be no effort or deliberate action.

This fact is true for building wealth over the long term as it is for selling shoes in a rural area. Without a positive mindset and hope for a brighter financial future, there will be no efforts.

Even in the worst of time, it important for you to think positive, courageous thoughts and refuse to let defeat and fear defeat you. “As a man thinketh in his heart, so is he.”

Bottomline, your peace of mind, the joy you get out of life, and wealth you build depends solely upon your thoughts and mindset. Your opinion of events and thoughts is entirely up to you.

“A man is not hurt so much by what happens, as by his opinion of what happens.” French Philosopher Montaigne

References:

  1. https://www.johnmaxwell.com/blog/how-to-cultivate-hope/

What is Success

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“You are the only one who knows whether you have won.” John Wooden

The best definition of success I’ve read was written by legendary UCLA men’s college basketball coach John Wooden who knew and achieved extraordinary success on the college basketball hardwood. His definition of success was:

“Success is peace of mind that is the direct result of Self-satisfaction in knowing you did your best to become the best you are capable of becoming.”

As you can see from Coach Wooden’s perspective, each person is the only one who can ultimately determine his or her own success.

It’s up to you and every individual to become as good as you can become with your respective gifts and talents you’ve been given and in the environment you find yourself.

The author Napoleon Hill (Think and Grow Rich) dedicated his life and professional and career to understanding the work ethics and ethos of highly successful people like Thomas Edison and Henry Ford.

From his life’s work, Hill determined there were more than a dozen elements of success demonstrated by exceptional business and civic leaders that anyone can embrace and practice. A few of those elements are:

1. They have a definite aim in life.

Hill likens having just a vague aim to succeed to being a ship without a rudder. “Bear in mind that both your definite aim and your plan for attaining it may be modified form time to time… The important thing for you to do now is to learn the significance of working always with a definite aim in view, and always with a definite plan,” Hill writes.

2. They are self-confident.

To be capable of setting ambitious goals, you need to believe you can follow the plans to achieve them. And when you believe in yourself, others tend to believe in you as well.

3. They practice self-control.

Hill says that he did not start to become successful until he learned that he was working against himself whenever he gave into anger or arrogance. “No person ever became a great leader of others until he first learned to lead himself, through self-control,” he writes.

4. They are focused.

Successful people are able to concentrate their energy and skills toward specific goals without becoming distracted by irrelevant issues.

5. They are persistent.

Those who are able to achieve success are not stopped by the inevitable nonstop challenges and setbacks that are in their path to attaining their goals.

6. They are resilient.

“When you begin to realize that failure is a necessary part of one’s education, you will no longer look upon it with fear, and lo! the first thing you know, there will be no more failures!” Hill writes. “No person ever arose from the knockout blow of defeat without being a stronger and wiser human being in one respect or another.”

7. They work hard.

Hill says that this sounds simple enough, but it’s important to remember that even if you achieve your greatest goal, you need to continue pushing yourself or risk losing everything you worked for.

8. They are empathetic.

Hill’s favorite philosophical maxim is The Golden Rule, which states, “Treat others the way you would like to be treated.” He uses it as the final rung of the ladder to true success.

References:

  1. Wooden, John, and Carty, Jay, “Coach Wooden’s Pyramid of Success”‘, Revell Publishing, Grand Rapids, MI, 2015, pg. 12.
  2. https://www.businessinsider.com/the-magic-ladder-to-success-2014-8

Purpose in Life: Standing for Something

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“We have the vision, which is the what. We have the mission, which is the how. We have the purpose, which is the why.”

There is a well worn aphorism that goes, “If you don’t stand for something you will fall for anything.” In other words, you must have a purpose for your life, or you’re likely to live aimlessly and to live a life without meaning.

To psychologists, purpose is “an abiding intention to achieve a long-term goals that is both personally meaningful and makes a positive mark on the world.” The goals and dreams that foster a sense of purpose are ones that can potentially change the lives of other people, like launching an organization, researching a disease, or teaching kids to read.

Your purpose will change over the course of your lifetime as your identity and responsibilities changes when going from teen into adulthood, and make the shift to retirement.

Like happiness, purpose is a journey and a practice. That means it’s accessible at any age, if you’re willing to explore what matters to you and what kind of person you want to be—and act to become that person.

If we’re able to revisit and renew our sense of purpose as we navigate milestones and transitions, suggests this research, then we can look forward to more satisfying, meaningful lives.

It’s imperative for young and old alike to know and embrace their purpose in life. By doing so, it gives life meaning and a mission. It gets you up out of bed in the morning and make your day joyful and rewarding when done with purpose.

Vision Mission Purpose

A vision (What) is where you are going or what you will become. It’s what the future looks like if goals and intentions are accomplished and laid out to be the driving force of how you define success. It is your destination at a point in the near or distant future. Vision defines your goal and sets the expectation of what you’ll experience when you arrive at the destination.

A mission (How) is an actionable vision statement — something that will give the vision legs and traction. It’s the what, who and why. It helps you define the immediate goals and helps you stay focused on the plan. It is the path you follow to arrive at your destination: When someone asks you where you are going, they ask you how you are going to get there. Your mission is the how: the unique way you do what you do, the path you choose to follow, the decisions you make to get to your destination.

Purpose (Why) is your sense and feeling of resolve or determination. It’s your why for you are doing the work you are doing. What great problem are you solving, or what movement are you championing? It’s your why do you show up. It is the reason you began the journey, guided by the deeply-held values and beliefs that inspire it to make a difference.

Your purpose is the reason you exists beyond making money. And, once you know your purpose, you know what fulfills and completes you.

Purpose focuses on three elements:

  • Why do you believe you can make a difference? — Purpose needs a reason.
  • How do you achieve? — Purpose needs a plan.
  • What will it look like when you achieve it? — Purpose needs vision.

If you’re creating or evaluating your mission statement, substitute the words Why, How, and What for Purpose, Mission, and Vision. These substitutions will help you minimize any confusion between the terms and what they mean.

  • Purpose guides you. Your purpose articulates the why you do what you do, why you exists beyond making money.
  • Mission drives you. Your mission statement is how you accomplish your purpose. Your mission is what drives you every day to fulfill your purpose. It’s a direct path between your purpose and vision. Mission is doing what matters and eliminating the distractions; it activates the strategy that delivers results and impact.
  • Vision is where you aspire to be. Your vision statement is what you will experience and achieve in the future, the results you are reaching for, the measurable impact you want to make. Your vision reminds you what the difference you make will look like and what change will happen. Vision aligns leaders and followers. Vision keeps you on course, to fulfill your purpose.

Vision is the picture. Mission is the road map to get there. Purpose is the feeling that you have when you accomplish what you set out to do. For example, here is a life purpose that might resonate:

“My life purpose, to love and honor God, is foundational. My professional purpose is to be a ‘Builder’ of a future that transcends ways of working for the wellbeing of people and businesses throughout the world.” –Miles Everson, Former Vice Chairman, PwC US

Your mission is your vision in action, connecting your purpose. Here are a few additional examples of purpose statements:

  1. I want to instill in others the self-love and confidence that gives them the self-efficacy to excel and make their dreams come true.
  2. To live each day to the fullest and appreciate, as well as learn and grow from every experience.
  3. To achieve the education required to serve the purpose God intended for me. With that education, I will give back to society generously, and remarkably leave the world in some concrete way better than it was before my contribution.
  4. To be a father who raises sons to be caring, loving, respectful, responsible men, protective of their loved ones, and daughters to be caring, loving, respectful, responsible women who know their value and will not compromise it.

Billionaire investor Warren Buffett says, “The difference between successful people and really successful people is that really successful people say no to almost everything.” Once you have clear and meaningful purpose, vision and mission, you’re better able to focus your attention on what’s most important and what you value the most in life. And, you learn to say “no” to everything else.

References:

  1. https://greatergood.berkeley.edu/topic/purpose/definition
  2. https://www.forbes.com/sites/forbescoachescouncil/2020/03/04/vision-mission-and-purpose-the-difference/?sh=113e4e70280e
  3. https://www.aespire.com/blog/communications/the-difference-between-your-purpose-and-mission
  4. https://zety.com/blog/personal-mission-statement
  5. https://www.lifehack.org/articles/lifestyle/10-wise-lessons-what-i-wish-i-knew-when-i-was-younger.html

Believe in yourself.

You are often your own worst critic, and so can you be your own best supporter. If you do not have confidence in your own value, abilities and contribution, then nobody else will either. You must have faith in your intrinsic worth. We each have something to offer that is necessary and valuable, though we may not know what that something is.

You do not have to be able to see the end zone. Just because you aren’t able to visualize where you might go and how you might succeed, that doesn’t mean it will not happen. And just because you may have made mistakes does not mean that you can’t achieve your goals in the future. You can do far more than you can imagine if only you believe you can.

The Present and In All Things Be Grateful

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“A happy man is too satisfied with the present to dwell too much on the future.” –Albert Einstein

The present is also the only place where happiness and peace can be experienced. Sadly though, the past and future are where many people choose to live their lives.

Equally important is that whatever happens in the now, there is always a choice in how to respond.

How you decide respond to what happens to you will be the ultimate deciding factor as to the quality of success, peace and happiness you will have in life.

Be Grateful For What You Have Now

Part of living in the present moment is taking the time to be grateful for what you have now (not in the past or in the future). If you are constantly focused on things you don’t have, you aren’t taking the time to appreciate what you have right now at this moment.

One way to practice gratitude is to write a list of things you are grateful for and review that list on a daily basis. Try to write at least three things you are grateful for in your life right now.

Alternatively, you can write out as many things as you can think that you’re grateful for.

In short, in all things be grateful.

References:

  1. https://www.success.com/if-you-want-to-be-happy-tell-the-big-mouth-inside-your-head-to-shut-up/
  2. https://www.verywellmind.com/how-do-you-live-in-the-present-5204439

Buying Stocks On the Dip

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“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful.” ~Warren Buffett

Billionaire investor Warren Buffett added shares of companies during the market downturn. He has been acquiring stocks on the dip during the recent quarter’s market downturn and bulking up his stakes in oil companies such as Occidental Petroleum (OXY)

Buying a ‘Wonderful Company at a Fair Price’

The most important concept to appreciate when buying stocks is that price is what you pay for a stock, and value is what you get. Paying too high a price can decimate returns and increase your investing risk. 

To delve deeper, the value of a stock is relative to the number of earnings or cash flow the company will generate over its lifetime. In particular, this value is determined by discounting all future cash flows back to a present value, or intrinsic value.

Buffett has said that “it is much better to buy a wonderful business at a good price than a good business at a wonderful price”.

Buffett’s investing style has been buying stocks on sale priced below its intrinsic value. He has never been one that favors acquiring commodities, but higher inflation rates could have played a role, Thomas Hayes, chairman of Great Hill Capital in New York, commented.

“As for Buffett buying shares in OXY, I wouldn’t make too much on it,” Hayes said. “Historically, he has avoided investing in commodity stocks. Today he sees it as a hedge against inflation and a potential supply/demand imbalance.”

Inflation is the biggest strain on the economy. While the pace of inflation eased slightly during the month of April, investor sentiment towards the Fed’s pace of tightening remains mixed.

The fact that he is deploying his war chest of cash is a strong indication that he and his lieutenants believe that there are undervalued stocks out there,” he said. “This doesn’t mean he believes that the market is undervalued or will rebound in the near future, but that some companies are compelling buys. This is a good signal for value investors.”

Buffett’s energy investments demonstrate the 91-year old’s investing strategy of acquiring shares in companies that have low valuations and shareholder returns in the form of dividends and buybacks, Art Hogan, chief market strategist B Riley Financial, told TheStreet.

References:

  1. https://www.thestreet.com/investing/buffett-buying-stocks-on-the-dip

Just for Today

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Think and act cheerfully, and you will feel cheerful.

Create your happiness by follow daily program of cheerful and constructive thinking written by Sibyl F. Partridge.

  1. Just for today, I will be happy. This assumes that what Abraham Lincoln said is true, that “most folks are about as happy as they make up their minds to be.” Happiness is from within; it is not a matter of externals.
  2. Just for today, I will try to adjust myself to what is, and not try to adjust everything to my own desires. I will take my family, my business, and my luck as they come and fit myself to them.
  3. Just for today, I will take care of my body. I will exercise it, care for it, nourish it, not abuse or neglect it, so that it will a perfect machine for my bidding.
  4. Just for today, I will try to strengthen my mind. I will learn something useful. I will not be a mental loafer. I will read something that requires effort, thought and concentration.
  5. Just for today, I will exercise my soul in three ways; I will do somebody a good turn and not get found out. I will do at least two things I don’t want to do, as William James suggest, just for exercise.
  6. Just for today, I will be agreeable. I will look as well as I can, dress as becomingly as possible, talk low, act courteously, be liberal with praise, criticize not at all, not find fault with anything and not try to regulate nor improve anyone.
  7. Just for today, I will try to live this day only, not to tackle my whole life problem at once. I can do things for twelve hours that would appall me if I had to keep them up for a lifetime.
  8. Just for today, I will have a program and plan. I will write down what I expect to do every hour. I may not follow it exactly, but I will have it. I will eliminate two pests, hurry and indecisive.
  9. Just for today, I will have a quiet half-hour all by myself and relax. In this half-hour sometimes I will think of God, so as to get a little more perspective on life.
  10. Just for today, I will be unafraid, especially I will not be afraid to be happy, to enjoy what is beautiful, to love, to believe that those I love, love me.

Written by Sybil F. Partridge and printed in How To Stop Worrying, And Start Living by Dale Carnegie, 1951

Gratitude and Building Wealth

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“Be thankful for what you have; you’ll end up having more. If you concentrate on what you don’t have, you will never, ever have enough.” – Oprah Winfrey

Gratitude is the secret to building wealth! Why? Because gratitude turns what you have into enough. This is what makes gratitude a foundational element to wealth building. Gratitude allows you to find joy in what you already have. Keeping up with the Jones is the silent stealer of wealth.  Comparison is the thief of joy.  

Gratitude, the practice of appreciating all that the stuff you currently own, is an essential factor in building wealth over the long term. For example,

Gratitude allows you to appreciate and focus on the assets you already own.

“Gratitude in advance is the most powerful creative force in the universe. Most people do not know this, yet it is true. Expressing thankfulness in advance is the way of all Masters. So do not wait for a thing to happen and then give thanks. Give thanks before it happens, and watch energies swirl! To thank God before something occurs is an act of extraordinary faith. And that, of course, is where the power comes from.” — Neale Donald Walsch

The way to your best life is owning every moment and staking a claim to the here and now, according to Oprah Winfrey. “I live in the space of thankfulness — and for that, I have been rewarded a million times over. I started out giving thanks for small things, and the more thankful I became, the more my bounty increased. That’s because — for sure — what you focus on expands. When you focus on the goodness in life, you create more of it.”

Oprah says when she started keeping a gratitude journal more than 2 decades ago, it was one of the most important things she’s done. The daily practice of writing down five things to be grateful for balanced her life in subtle and inspiring ways. “It sounds simple,” Oprah says, “but when you go through the day staying conscious about what you put on your gratitude list, it shifts the lens through which you see the world.”

The practice of gratitude begins with being grateful for all the things you currently have – family, friends, experiences, and assets. Gratitude is focusing on all that you have and being thankful.

Wealth is much more than material things and owning assets. It is the presence of having a life filled with happiness in being, doing, and having what you want in life.

All too often, you fail to recognize your accomplishment because you are too busy moving onto the next task on your agenda. Yet, much of your success has to do with the people around you who have helped you focus on what’s important and helped you reach your goals.

Always remember, success, like wealth building, is a journey.

Building Wealth Takes Time

Some people are reluctant to make a wealth-building plan because they don’t want to wait 10 years. They would rather enjoy their money now.

The folly with this type of thinking is that most of us are going to be alive in 10 years. The question is whether or not you will be better off 10 years from now than you are today. Where you are right now is the sum total of the decisions you have made in the past. Practicing gratitude now can line you up for success and wealth building in the future.

Measure and focus on what you want more of. What you focus on expands.

You may think of money and wealth when you hear of measuring what you want more of, however; the same holds true for expressing gratitude. Make a list of things you are grateful for or write out what you are grateful for in a journal.

Complaining, blaming, or venting puts your focus on the negative things in life. You may wonder why some people seem more abundant than others.

To build wealth, it’s best to follow the two strategies that have the highest chances of success. And that is to practice gratitude, and to get into the habit of saving and investing early and to keep it up.

Gratitude is the key to building wealth

You might think building wealth is all about money, but it’s also very much about mindset. If you want to cultivate a money mindset that helps you build wealth, gratitude is a key component. Because gratitude can help shift your mindset from scarcity to abundance, help you spend less, and feel better. 

There is so much abundance in front of you if you choose to see it. The more you intentionally work to change your mindset, the easier it will become to see the abundance in life.

Actively practicing gratitude helps you realize how much you have to be grateful for right now instead of focusing on what’s missing. 

A scarcity mindset focuses on what’s missing and always wants more. It feels like there is never enough. This mindset can be harmful to your financial health because you can make poor decisions out of fear.

When you are in an abundance mindset, you realize your opportunities are limitless. You believe there’s never enough, instead you think there is always more than enough. Focusing on abundance can help you attract more money and have a healthier money mindset. 

Gratitude can help build that abundance muscle. Let’s say that you have a studio apartment but you dream of having your own 2-bedroom house. You don’t have the car you want now but imagine getting a Tesla. 

When you focus on gratitude, you focus on the fact that you have a roof over your head, that you’re healthy, and that your car still works instead of focusing on the fact that you don’t have a 2-bedroom house or Tesla yet. 

When you focus on gratitude and appreciate what you have now, you start to realize that you need even less than you thought. In today’s culture, we are conditioned to want more, to seek bigger and better, which of course affects our spending. 

Being content with what you have now can lead to less spending because you realize you have everything you need. That doesn’t mean that you can’t strive for more. It means that you can truly enjoy the journey rather than feel the emptiness of what’s missing. 

When you acknowledge and are grateful for whatever you have, it allows more to be drawn to you and changes the way you experience life. The more grateful you are, the more wealth that you have.

“Feeling grateful or appreciative of someone or something in your life actually attracts more of the things that you appreciate and value into your life.” — Christiane Northrup

References:

  1. https://debrakasowski.com/2014/02/22/what-does-gratitude-have-to-do-with-wealth-building/
  2. https://www.goalcast.com/7-oprah-winfrey-quotes-to-charge-your-day-with-gratitude/
  3. https://www.oprah.com/own-podcasts/oprah-winfrey-grace-and-gratitude
  4. https://www.newretirement.com/retirement/keys-to-building-wealth-after-50/
  5. https://www.thebalance.com/how-to-become-wealthy-356376
  6. https://grow.acorns.com/self-made-millionaire-money-habits/