I think rookies overlook one crucial factor in becoming a wealth creator.
And that is: not becoming a wealth consumer!
What do I mean?
Imagine you’ve created value that amounts to your first $10,000 per month. Now, what good is that if you also consumed $9,000 of that wealth in non-business expenses?
In other words, you’re left with $1,000 because you went on a shopping spree.
Now, the problem I see is that most rookies have a specific money goal in mind. But, once that achieve that number they’re looking to CONSUME it on something else that won’t necessarily GROW and CREATE MORE WEALTH!
For example, I have a buddy that sold one of his websites for a decent six-figure sum. In fact, living off dividends from that sum would make for a pretty nice lifestyle. But instead, he spent it all.
In other words, he consumed it all. He did not create more wealth with that money.
So how do you change your relationship and habits with money in order to continually stay a wealth creator?
How To Be A Wealth Creator And NOT A Wealth Consumer
I believe the first step is understanding that in order to create wealth you need to create value.
I already talk about this in-depth in my other posts. In short, use your talents to solve problems at scale.
If you’re really stuck then check out Digital Flipping. You can learn how to leverage other people’s talents instead.
Now, once you get that handled and start earning some money then I believe the next step is to understand that your ENTIRE lifestyle and choices must revolve around creating more than you consume!
It’s not enough to just create wealth. You must also keep your consumption proportionally lower than what you create.
For example, if you earned $10,000 this month. Can you live off 50% of it? How about 20% of it?
Whatever your lifestyle choices are I believe you should be disciplined enough to live off a fixed percentage of whatever you earn. Otherwise, you may quickly find yourself broke no matter how much you earn.
In order to do that I believe you must:
- Really understand what makes YOU happy
- Understand what sources of expenditures are the most efficient and economic in fulfilling your happiness
- NOT get sucked into the consumerism and comparison culture where utility of an expenditure is overlooked
- Take a hard look at all your habits, choices, and expenses. And ask yourself whether that choice is a source of creation or consumption.
- Ask yourself how can you use your new found wealth to create more value in the world.
This leads me to the last step.
I believe the final fundamental principle is to always be creating more wealth.
I often hear rookies say something along the lines of, “Once I make a million bucks I’m just going to travel the world.”
In other words, they see their entrepreneurial end goal similar to retirement, where once you hit some destination you’re done.
The problem with that is, chances are, you’re going to run out of money because at that stage you’re likely to consume more than you create!
My viewpoint is: As long as you’re alive you must continually create value.
Once you stop adding value then what purpose does your life serve?
Now, I’m not saying to never enjoy your earnings. But, keep in mind, continual consumption without creation leads to a zero balance.
The goods news is you can still create value by investing in others that are putting in the work to create more value. Just because you may be physically spent doesn’t mean you can’t continually create more value.
Once you build your own nest egg, I recommend you invest in other people that are creating more value.
This can help you grow your nest egg and create more value. That way your consumption will still be lower than your creation, and your nest egg doesn’t just deplete (if you’re smart).
You may want to look into dividend investing, Harry Browne’s permanent portfolio, and being a Perpetual Traveler if you’re at the stage where you can invest.