Accumulating Wealth with Financial Literacy and Self-Discipline

Millennials and younger generations can chart a consistent course that has the potential to lead them towards becoming millionaires in the future. It doesn’t require a unique set of skills, specialized knowledge, or even excessive risks. Americans who achieve millionaire and multi-millionaire status using this technique took an average of about 32 years to accumulate multi-million dollar wealth, with some reaching it in as little as 18 years. They are called saver investors, and when you encounter one, at first glance, they might not seem that rich.

What is a Saver Investor?

Saver investors are typically ordinary people without any particular advantages in life. They did not come from a wealthy family. Nor did they have unique or advanced skill sets that brought in high salary income. Primarily, investor-savers didn’t attend elite universities, get advanced degrees, inherit money, or own high-end cars, clothes, or homes.

What saver-investors do have is the disciplined ability to follow two simple rules. The first rule is saving 20 percent or more of your income and having the discipline to live off of the other 80 percent. The second rule is consistently and prudently investing your savings. Practical investing means doing your homework for each investment vehicle and then continuously monitoring its progress. Typically, a saver investor puts their money in retirement plans like a 401(k), equities, and real estate to let valuations grow.

If the key to building wealth is so simple, then why isn’t everyone rich? Quite simply, it comes down to the financial habits of people. It requires enormous fiscal discipline and a long-term commitment to become a saver investor. It can require sacrifices, like running a side business or working a second job. John Jacob Astor famously said, “Wealth is largely the result of habit.” Long-term wealth creation is built on a foundation of consistent and sound financial habits.

Sound Financial Habits

One habit is to eliminate distractions by learning how to say no. If something isn’t aligning with your goals and dreams and will keep you from moving forward, it’s a distraction and should be eliminated. Say yes only to things directly tied to your goals and dreams.

Every day you need to learn something new. Grow your financial literacy and develop new skills. Use this new knowledge or expertise to maintain and perfect your skills. Save money because it gives you options, empowers you, and offers freedom. Opportunities are only as good as the financial resources you have available to take advantage of them. Talk to a financial advisor or reach out to an estate planning attorney for advice. Learn how to prepare for challenges.

Surround yourself with other like-minded individuals because social circles influence our feelings, thoughts, and behaviors. Calendar your day by the hours or even half hours to be highly effective. Isolate blocks of time in pursuit of those things that will help you build a foundation for success through financial independence.

Finally, develop patience. Acquiring wealth as a saver investor takes time. When things get tight in daily life, remember to survive until you thrive. It isn’t good luck that’s going to make you wealthy; it’s persistence to maintain good financial habits.

Being Content with a Modest Lifestyle

Part of living off 80% of your income includes choosing to live a modest life. Business magnate, investor, and philanthropist Warren Buffett still lives in his first home, purchased in 1958. Drive an ordinary car and wear simple clothes and jewelry. If you have children, send them to public schools. If they need a better education, supplement their learning by teaching them yourself or signing them up for free online courses. There has never been a better time for humans to become knowledgeable about how to gain wealth. The internet gives us vast information in the palm of our hands. If you genuinely want to be wealthy, then develop good habits, live beneath your means, and employ the saver-investor method.

This article offers a summary of aspects of estate planning. It is not legal advice and does not create an attorney-client relationship. For assistance, please contact our Forty Fort office or call (570) 288-1800.