Growing Online Income

Get Wealthy: I’ll Show You How!

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Here is a title we’ve all seen before. Nothing new about it. And yet you still decided to click on it, because you’re curious if there is something in this article that differs from all others that you have read before. Perhaps a little background will provide you with the necessary insight to understand how we can take control of our finances and start building a nest egg today.

What is Wealth?

If wealth creation is at the top of your agenda, perhaps you should ask yourself if you truly understand the difference between wealth and having money? A lot of money does not necessarily translate into wealth but having a lot of wealth can translate into lots of money. Think of that for a moment: Assets can be converted into cash holdings, but wealth is not defined purely by monetary holdings alone. Fixed and immovable property, vehicles, equipment, factories, perhaps even education can be considered integral components of your financial portfolio. Your intellectual abilities whether academic or business savvy are paramount. Perhaps the best analogy of differentiating between being rich and being wealthy is found in the following example:

Suppose Solly wins the Powerball and suddenly comes into $50 million overnight. Before winning the lottery, he was a minimum wage earner.

Is he rich, or is he wealthy? He’s rich for sure but does he have the wherewithal to manage that money and make it work for him? That’s where business savvy or money smarts comes into the picture. If you burn through a finite resource, it gets depleted. However, if that finite resource is leveraged to generate additional income streams – it is no longer a scarcity – it is an income-generating investment. Therein lies the difference between being wealthy and being rich. The waters get muddied a little bit along the way, since wealth and money are so interconnected that they seem like the same thing.

To put it another way, consider somebody who earns a lot of money but works from one paycheck to the next. Now consider somebody who uses financial resources to create residual income streams. If you can generate passive income on an ongoing basis, and no longer work for those weekly wages, or pay checks you’re operating at a different level. Wealth is more a way of life than simply having cash in the bank. It’s the way you live, the way you invest, the way you trade, the way you manage your resources that determines if you’re wealthy. All wealthy people are rich, but not all rich people are wealthy.

Definitions aside, how can you put together a wealth creation plan?

Surround yourself with experts in the financial field says Olsson Capital trading pro Hamish Giles,

Over the years, I’ve seen many people with money make poor decisions. Does this mean they are undeserving of being labelled wealthy? Methinks not. It has to do with a deeper understanding of the mechanics of investment-related activity, or trading activity. If money is the reward for work, intellectual acuity, professional insight, and the like, it is clear that it is associated with payment for something that others want from us. We work and get rewarded. Money is not simply paper or coin – it is symbolic of a need that you are able to fill in society. From that perspective, it’s important to be mindful of how you go about compiling a financial portfolio.

There are certain things that I do every morning that help me to stay sharp where financial matters are concerned. For starters, I check the daily economic calendar to see which events, announcements, and upcoming data releases are going to affect the financial markets. All the theory in the world is worth nothing if you don’t put it to good use. If the Fed is likely to increase interest rates, the smart money is on banks and financial stocks. Why? Because they benefit most from rate hikes. Therefore, it’s always a good idea to purchase bank stocks like BAC, WFC, C, or other stocks in anticipation of a long-term trend in rising interest rates. Ultimately, the short-term volatility will be replaced by long-term gains. That’s how you build wealth.

There are many other indicators that can help you to put your money to work for you. For example, the recent tax overhaul will put more money into the pockets of US taxpayers. Since the standard deduction will be doubled, there is over $12,000 – give or take – that is not taxable. This money will find its way back into the economy in the form of increased spending on goods and services. Companies that cater to low income earners such as McDonald’s, Walmart, Kmart, Target, Sam’s Club etc. will naturally see rising sales through this tax break. It may not be bad advice to start investing in restaurant and retail giants as these tax breaks filter through the economy.

True wealth comes from your ability to curtail the proverbial urge to splurge. Live beneath your means even when you have enough resources to live the dream. The safety of well invested funds is far more satisfying than a knee-jerk purchase with retail therapy. The reason we work so hard is to provide for the present and the future!

The verdict is in

There are a few takeaways from this piece that should linger long after you finished reading this article. If you’re looking to create wealth, you should not be working for your money – your money should be working for you. Secondly, if you learn to live beneath your means, you will always have more available than you need. When you combine these truisms, wealth creation is right there on your doorstep!