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Are You Building Wealth or is it Just a Dream?

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building wealth

We all have the fantasy of building wealth and traveling around the world with no cares. Who doesn’t want to have financial freedom and the ability to do what they want when they want? I dare you to give me a name. Seriously, I will reach out to them and ask why.

The hard part of this fantasy is most of us can’t fathom actually reaching said dream. We might be deep in debt, in a low paying job, or be slow with our wealth creation. No matter the reason, the dream seems unattainable.

Well, I want to stop thinking of excuses for why I can’t reach the dream and figure out goals that will help me do it. I love working, but I want to do it on my schedule. If I don’t want to work for a few weeks or months, I want to be able to do that. Trust me, self employment is not the answer to that dream. I am not knocking it, but that is because I have been self-employed before. I know how much hustle it takes.

The bigger question surrounding this fantasy is how to create enough wealth to reach it. Building wealth requires a number of items to be fulfilled. You need to be out of debt, have an income, and some time of investment opportunity. You can’t build wealth with just a savings account. It just doesn’t happen. Sorry for those people who are afraid to invest, but if you want to reach financial independence, you better jump on the investing train!

How I Am Building Wealth

 

I have wanted to build wealth for some time. My dreams of financial freedom came when I was a teenager and got my first true paycheck.That was a glorious day. It seemed like a lot of money at the time, but it wouldn’t hold me over now. Oh, the life as a teenager. Those days were so easy.

I didn’t really start to build wealth until I rid myself of credit card debt. Your net worth is a negative if you have more debt than you have assets.That was me in a nutshell. Technically, building wealth for me started with my first credit card payment more than the minimum. Over the four years I fought debt, I was slowly building my wealth.

I also focus on my wealth with assets. We own a home on which we put down a large down payment. Instant equity people! We also have three vehicles, two of which are paid off. While they are depreciating assets, they are still assets which can be sold for cold hard cash. That is wealth.

My latest and most effective wealth creation strategy is investing. I started investing when I got my first job out of college. Unfortunately, I didn’t follow very strict rules and didn’t even contribute to my 401(k) up to my company match.

I know, I know. Hate me if you will. I have changed that, along with adding a Roth IRA, and have just jumped into regular investing through a few brokerage accounts. My goal is to have a diversified portfolio of dividend income that I can tap into when I need it.

Jumping on the Investing Train

 

I have learned investing is the best way to increase the speed at which I’m building wealth. Yes, I can stick my money in a CD or savings account, but by the time I can retire, I would be about 200 years old. Medicine and technology advancements are great, but not that good. Not only am I focusing on funding my 401(k), but also my Roth (up to the max), and then going out on my own with a regular investing account.

The reason why I wanted to have my own investing account is I want to be able to have access to my money before a set age. I don’t like age restrictions on my money, especially when fees are involved.  Boo!

So, there you have it. There is my plan for building wealth. My plan requires I stay out of consumer debt and having been down that road before, it shouldn’t be a problem. If you have a lot of debt, no matter the kind, then start your wealth building by killing it. Seriously, take it outside and go all Office Space on it. Once you get the debt killed off, then put the pedal to the metal and work every wealth building angle you can find. That is my goal and I am working hard to reach it.

 

What about you? Is building wealth just a fantasy to you or are you doing something to achieve it? If so, what’s working for you? If not, what’s holding you back? Let me hear your favorite strategies.

 

Photo courtesy of: Jeff Belmonte

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Grayson is the owner of Debt Roundup and Empowered Shopper. He also co-owns Sprout Wealth and Eyes on the Dollar. After going to battle and winning against consumer debt, he decided it was time to learn how to use credit wisely and grow his wealth. He discusses all things personal finance and is not afraid of being controversial. He also is a freelance writer and blog manager.

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44 Comments

  • I have only a few shares of stock from stock options in my company that are outside of my retirement portfolio. If I had extra funds, I might like to buy some more unregistered ones. While we are focusing on debt paydown, I don’t see that happening, but will continue to look for opportunities. We just cut cable, maybe I should take that money and put into stock purchases!

  • Even though I’m far away from reaching financial independence, particularly limited by income, I don’t see the dream as something far off. In fact, I often feel like I’m living it every day.

  • Gretchen says:

    We’re still fighting debt, and will be for about 3 more years, but I have to remind myself almost every day that by paying the extra that we pay every month, I am beating debt. But, a better way to look at it might be what you pointed out – each extra payment builds wealth. Thanks for this!

  • Nicola says:

    I am someone who hasn’t actually jumped on the investigation wagon yet, due to being worried about losing everything. I will soon, I just need to get my head around it.

  • We are saving, investing, and trying to pay off our rental properties. All of those things combined are adding to our net worth dramatically each month.

  • Kathy says:

    Love those dividend paying stocks. So much so that we only buy stocks that pay them. Until Apple started paying, we passed on that company. Partner dividend payers with bonds and you can build a dandy portfolio that pays you every month (or week eventually).

  • I like your plan, John! To build wealth, I am 1) getting out of debt and 2) accumulating assets. Primarily, I accumulate assets by investing. Right now it’s through a Roth and index funds. After I’m out of debt, I hope to make investing more of a hobby and get into individual stocks. Maybe even real estate / rental properties eventually. We’ll see!

  • Building wealth is all about giving me time freedom and financial freedom, in my world.
    I am working on building a few projects online, plus we are hitting a point where we are able to dump a large amount of money into investments. Only 15 years to go, haha.

  • Kipp says:

    Great post Grayson! I am working hard on doing both investing and killing debt. I don’t know if I will be close to maxing out retirement accounts in the future, that will be more likely when ALL debt is paid off including mortgage. I guess I am lucky in that I never accumulated credit card debt. I do have other debt between the wife and I in a car loan, student loans, and a mortgage. But I have confidence that we can continue to pay that off while building up our 401(k), ROTH, and brokerages. May I get a better deal going all 401k? Possibly, but as you mentioned flexibility and freedom on accessing the money have their worth too.

    • Grayson Bell says:

      Thanks Kipp! No matter the debt, get it killed and start earning that money. I wouldn’t go all 401k as they tend to have higher fees and more restrictions depending on the provider.

  • Kim says:

    I feel very hopeful about our chances of retiring in about 10 years. Our rentals should be able to cover basic expenses and whatever we make will just be cake. It’s hard to put most of our income every month into investments, but it will pay off. I think everyone wants to be financially independent but most just don’t think it’s possible. That’s why they follow the YOLO philosophy and spend way too much or think they will start tomorrow when you really have to start yesterday. I wish I’d always invested instead of spending. I could be retired right now!

  • This is a great reminder Grayson that wealth comes in a number of different forms. Sometimes I get bummed that our cash savings isn’t as large as I would like and then I remember all of the cash that is in my home waiting to be unlocked one day. We are building our wealth through our home, our retirements, my son’s college education account and my business.

    • Grayson Bell says:

      Thanks Shannon! Wealth does come in different forms. Many people forget that bringing your net worth to zero is a form of building wealth. You are working in the right direction!

  • We’re definitely doing something to build wealth so we can achieve financial independence. The wealth building is a slow process, but I see growing slowly each day.

  • We are saving/investing and creating additional streams of revenue in order to secure our FI. I’m glad you mentioned that self-employment is tough and is not for everyone – this is coming from someone who is self-employed.

  • I’m getting really tired of paying off our debts, so it was encouraging to read your advice. “If you have a lot of debt, no matter the kind, then start your wealth building by killing it.” Glad to know we’re doing the right thing – even though I want to be done with this stage already!

  • Wealth seems to me to be elusive, at least for now. Right now I’m concentrating on trying to find work and continuing to eat. Unemployment can do that to a fella!

  • For all intents and purposes, debt reduction is in the category of wealth accumulation, so I guess I am 🙂 I’m also funding my 401(k) at a 13.5% rate with employer contributions, so that’s definitely helping. But other than that, we’re still in the basic stages.

  • Jason B says:

    Unfortunately I’m not able to build wealth right now. I’m working on eliminating this debt. Once that happens I will get on the wealth building train asap.

  • It was a fantasy at first, just contributing 3% and thinking that would somehow get us there.
    I had to wake up and realize I needed to probably have another career. I was in a job that I was great at, but in the long run it wasn’t going to get me where I wanted to be financially. I researched the top companies with benefits in the state and was lucky enough to get on at one. The retirement plan is insanely awesome for employees, I mean crazy! I’ve been there 8 years and I was able to max out 401k and Roth and have done so for the last 6 with huge contributions also coming in from work so we’re seeing our investments sky rocket which help make up for the first years at just 3%.
    When you see investments grow like crazy it makes you realize how powerful compound interest is and how you need to start right away and keep going. I am in a completely different spot than I was 8 years ago trying to do it on my own at a job that wasn’t going to get me there.

  • Karen says:

    Initially I thought only the wealthy (those earning six figures or close to it) could build wealth, but after I started investing, becoming more frugal, saving more aggressively, and having multiple streams of income, aside from my full-time job, I realized that building wealth is possible for anyone, regardless of your income.

    You just need to be meticulous about your budget and have some discipline.

  • John Green says:

    I think the investing part is where a lot of people get mixed up. With that being said, I like the way you told readers exactly what you do.

    Stocks can be scary (especially for young people), so telling them how and more importantly why to invest is very helpful.

    If stocks aren’t for you, use mutual or index funds to limit exposure and risk. It’s truly the best way to build wealth with near zero interest rates.

    • Grayson Bell says:

      There are many ways to invest without touching stocks. The key is to start learning them and then doing it. Investing is one of the only ways to actually build your wealth quicker and to a higher level.

  • Laurie says:

    Grayson, love your awesome honesty as usual. That is us too, and I have to remember that even though we are still paying off debt, we are indeed working toward our dream and building wealth at the same time!! Even though our credit card debt seems to be moving very slow, when I looked at our overall debt reduction and net worth change since we started tracking a year and a half ago, it’s very evident that we are indeed building wealth. It’s great to have a dream, but eventually you’ve got to follow up that dream with ACTION.

  • Simon Elstad says:

    Building wealth used to be a fantasy. Now its a reality. In part thanks to the honesty of folks like you on the same journey 🙂

    Like a lot of folks here, am tackling debt first, and man it can be hard. You elminate some and then somehow you slip right back.
    That said, wealth building requires patience. Am in for the long haul.

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