Building wealth doesn’t have to mean sacrificing happiness and pleasure now for a better life in the distant future. You’ve read all of the financial advice that tells you to skip the lattes and the avocado toast if you want to have a decent retirement.
But this advice misses the point.
The principles for building wealth are simple, but they don’t require you to skimp on everything that brings you joy. The better strategy is to keep spending money on the things that you love but stop spending money on all of the things you don’t like.
Simple Principles for Building Wealth
If you want to build wealth, you need to do two things. One, you have to spend less than you earn. If you are deep in debt and living paycheck to paycheck, you won’t be able to build wealth until you decrease your expenses and increase your income.
The second principle to wealth building is that you have to put your money to work. Once you are living within your means, you need to take your excess money and invest it. Traditional retirement accounts are an excellent start to building wealth.
Building wealth is simple, but it’s not easy.
Happiness Has Value
Many well-meaning financial experts advise you to skip your fancy morning coffee because they are trying to teach you to lower your expenses. Again, you can never build wealth if you spend every penny instead of investing some of your earnings.
But what many people don’t understand is that happiness has value too. We all want to enjoy life. If you forego everything that gives us happiness and pleasure now, most of us won’t have the motivation to keep working hard and saving for a distant future.
You will be more successful in saving money if you allow yourself some reasonable pleasures. If shoes, coffee, or comic books make you happy, allow yourself to enjoy these things each month.
Instead of skipping these simple pleasures that make life more bearable, save money on things you don’t like spending money on. Buy a used car instead of a new one. Buy generic brand grocery items. Look for better deals on your insurance.
Focus Energy on Building Wealth & Happiness
When you focus your energy on cutting the expenses that frustrate you, you can make more progress on building wealth and happiness at the same time.
Everyone has mandatory expenses and discretionary expenses. If you don’t want to cut your discretionary spending, you need to find ways to reduce your mandatory expenses.
With the internet, it has never been easier to find better deals on everything from credit cards to renter’s insurance. When you focus on building wealth by cutting your spending on things that don’t bring you joy, you will make faster progress than you will by cutting out the small expenses that make life worth living.
What can you do today to increase your wealth and happiness?