When it comes to building wealth, I have found there is one simple equation that separates the wealthy from the poor. This equation is EASY to follow once you understand it.

I used to think building wealth was a complex understanding of stocks, derivatives, indexes, bonds, rates, data & everything else Wall Street comes up with to make finance confusing.

Now I know what wealth building really is. This simple, yet effective equation is what I have found separates the wealthy from the poor.

What does the poor mindset do?

The poor mindset does this with their money:

Make money —> Spend it —> Invest what is left over (if there is any)

Someone with a poor mindset will make money from their job & then focus on how to best spend it. They will go buy new clothes, go buy new shoes, go buy things. Then at the end of the month, if there is anything left over, they will save it.

This mindset is bad because you are reliant upon your income to keep you afloat. You are setting little to nothing aside into assets. Every year you don’t invest is another year you start falling behind. Inflation isn’t stopping, so you need to grow your money.

If you are someone who is in this category, don’t fret, because you are in the right place. My mission is to help people understand the importance of being good with money.

Real quick, my podcast called The Decade Investor Podcast releases a new episode every Monday & Wednesday. This week I dropped two new episodes:

1. The 2 reasons people lose in investing

2. Another 5 reasons people lose at building wealth.

You can listen to them on any podcast playing app here: https://thedecadeinvestorpodcast.buzzsprout.com/share

What does the wealthy mindset do?

Same inputs, different order:

Make money —> Buy assets —> Spend what is left over

This small change in the wealth equation is what I have found separates the wealthy from the poor mindset.

This means rather than spending what you make THEN putting money away, it is putting money away first THEN spending what you make.

How do you do this?

1. Set up auto investing. Every paycheck set aside a certain $ amount or a certain % of your money into assets. I do this myself and it is like building wealth on auto pilot.

2. Know what is happening with your money. Not saying you have to track every penny, but you need to know where your money is coming from & where it is going. AKA have a budget. This allows you to understand the flow of your money.

3. Understand the wealth equation. For me, understanding this change in equation is what has helped me get to nearly $400,000 invested at 25. It works for me, so I am confident understanding it can work for you.

It doesn’t matter the $$$ amount or the % in the equation. The main focus is before you spend money, buy assets. Then do this over & over & over & over & over again. Repeat every month, every year. Eventually you will look up and your assets will be bigger than you can ever imagine.

If you forget it, post this on your wall:

Make money —> Buy assets —> Spend what is left over

Keep going. Keep building wealth. I am your biggest fan!

I want to help you too. I will be able to help you… soon. Stay tuned, I have something coming in the beginning of 2024 that will revolutionize the game for Decade Investors.

(x)Tweet of the Week:

My mom wasn’t too happy with my investing talk this year at Thanksgiving!

Thank you so much for reading & I will see you next week! Until then, keep buying assets.🙂 

- Decade Investor