The wise man saves for future days,
Delaying pleasure in frugal ways,
Building wealth with each coin saved,
A future secure, a life well paved.
Achieving financial freedom and building wealth require a combination of the right mindset, focus, self-discipline, patience, gratitude and knowledge. “The freedom to do what you want, when you want, with whom you want, for as long as yo want, is true freedom,” says Morgan Housel, in The Psychology Of Money.
The six keys to building wealth over the long term are mindset, focus, discipline, patience, knowledge and gratitude. A seventh key is health.
It’s effectively about your mindset. Wealth is achieved by habitually investing in yourself first and foremost. Winning at finance and at life is 80 to 90 percent habit/behavior and 10 to 20 percent knowledge/skill. Knowing what to do isn’t the problem; actually doing it is. Most of us know what to do, but we just don’t or won’t do it. If you can control the person in the mirror, you can be fit and wealthy.
Once you adopt the mindset of the individual you aspire to become, there are no limits to what you can achieve.
Once you realize that everything in this life is but a thought, mindset and resulting habits, you are guaranteed to alter your life’s trajectory. “Doing well with money has a little to do with how smart you are and a lot to do with how you behave,” explains Morgan Housel, in The Psychology of Money
Be disciplined enough to delay instant gratification while building wealth. “Rich is the current income. Wealth is income not spent. Wealth is hard because it requires self-control,” concludes Morgan Housel, in The Psychology of Money. The truth is that wealth is what you don’t see. Wealth is the nice cars not purchased. The diamonds not bought.
Careless spending and a conspicuous consumption lifestyle make you a slave to capitalism, while saving and investing in assets builds wealth. “Spending money to show people how much money you have is the fastest way to have less money,” writes Morgan Housel, in The Psychology of Money.
Building wealth requires a long-term perspective and a willingness to make sacrifices in the present for future benefits.
Final key point, getting healthier should be equally as important as building wealth. It is stated repeatedly and for a very good reason that “health is wealth”.
References:
- Morgan Housel, The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness, September 2020.
- https://www.sloww.co/psychology-of-money-book/