Introduction
If there could only be one thing that determines whether or not an individual is going to be wealthy or not…it would be Commitment. Commitment can be defined as the state or quality of being dedicated to a cause, activity, etc. If an individual makes the choice to become wealthy, that individual will become wealthy as long as the commitment is established and reinforced throughout the journey. The beauty about it is that commitment does not require a high level of skill or intelligence…it only requires will power. Therefore, if an individual wants it bad enough, he or she will get there. It’s just a question of when. Granted, there are multiple variables to take into account such as age and an individual’s current financial situation, however wealth can be built regardless due to commitment.
Now of course, the individual needs to become educated regarding money and personal finance. However, an individual can and should take action IMMEDAITELY even before the individual becomes educated (please see action steps below). In addition, once the rudimentary education is acquired and a plan is established, the individual’s commitment will determine wealth…not the individual’s skill. Individuals may be intimidated by all of the moving parts regarding money and financing, but again as long as the plan is established up front…the execution stage is actually not complicated…it is just hard (yet simple) due to the will power it takes. But I promise you, once you start and track your progress (use a personal software tool such as Personal Capital) you realize that you make baby steps every day. These baby steps are in fact results of your hard work. These steps become visual to you once a personal software tool is obtained. If planned correctly, these baby steps turn into bigger steps and then they turn into huge steps…without exerting any additional effort. This is an outcome of saving money and having the money work for you…as oppose to spending it.
Click here to install Personal Capital for free! Please view my main page for an overview of the software tool as well.
In business school, we learn that the execution stage may be the most difficult and complicated part for business plans and entrepreneurship. This is not the case when it comes to personal finance and building wealth. Once a plan is established, one can execute by simply exhibiting daily habits and automating payments, savings, and investments to increase wealth. As long as daily habits are executed and individuals are mindful of their spending, building wealth is actually very…very simple. However, it requires commitment. Commitment requires hard work and a strong mindset, but it is not complicated or hard to understand.
Commitment & Delayed Gratification
Ultimately, I think that this is fantastic news for all who want to become wealthy. Why? Because building wealth is not complicated and it is not about whether you know about the next hottest stock or invest into the next hot IPO (initial public offering). It is about being patient and having commitment. Another term to implement is the concept of delayed gratification. Delayed gratification is the ability to resist the temptation for an immediate reward and wait for a later reward. Rich individuals know what this means. Poor people do not. This is because poor people do not have the patience and commitment to build wealth…they want everything now so they spend their money and take on debt that they cannot afford. However, self-made millionaires establish a vision and commit to it. As a result, they do not spend money…they save and invest it. Rich people know that sacrificing rewards today will come back 10x later in life due to the power of investments and compound interest. This takes a tremendous amount of commitment because while everyone around them are posting about the new toy they just bought or the new house they just bought, a rich man or woman will pay it no mind…they know that saving money buys freedom. Not toys.
Personally, I am strong willed. I do whatever it takes to reach various goals that I establish. I am currently saving close to 50% of my salary. This is an absurd figure and it takes a toll on my life…believe me. My social circle has shrunk significantly. Sometimes I bend and I have to take a few deep breaths to recompose myself. But I focus on my vision of relaxing on a beach for decades…that’s a strong vision. Then I get back on the horse and continue to be frugal, save, and invest. The secret to getting rich is to have that vision. KNOW that you will be rich…commit to it…and then you will become rich.
Testimonials & Support
Robert Kiyosaki…famed businessman and author of “Rich Dad Poor Dad”. This man once found himself dead broke and in debt over $1 million after a failed venture. Yet, immediately following he claimed that he was a rich man…“I am a rich man…and rich men don’t do that.” He knew that he could indeed give up on building wealth…but he didn’t. Instead, he reinforced this mindset in his head when it came to making daily decisions to increase his net worth. If you can make the choice and keep the commitment….you can become rich.
Arnold Schwarzenegger is perhaps one of the most successful people of our time. He is a huge advocate of having a vision. He believes that once a vision is established, the goals and struggles required to get there are much easier to execute (on a mental level) because you know where you are heading. The same exact concept can be applied to building wealth and establishing commitment. To become wealthy, you need to make the choice and have a vision of having an abundance amount of wealth. Commit to the choice. Period. It’s that simple.
“Think and Grow Rich” by Napoleon Hill is a personal finance classic. One of the takeaways from this book is that every morning an individual needs to remind themselves of their vision and commitment to becoming rich. You need to instill the notion within your subconscious.
Immediate Steps
Within my post, “With Personal Finance…Simple Works”, I touch upon action steps. But I am going to tweak the steps for someone who is 100% committed to building wealth. These steps should be executed in order as indicated below.
- Commit: 100% commit to building wealth. No exceptions
- Stop Spending: stop spending money on non-necessitates.
- Acquire Personal Capital: through personal capital, you can track your spending and saving which will convey and reinforce progress
- Pay Off Credit Cards / Build Small Cash Cushion: credit cards carry a very high interest rate so these should be a primary focus. It is also important to save $500 – $1000 to just hold within a separate checking or savings account.
- Automate 10 – 15% of Income to Savings & Investments: automatically start sending earned income into separate account vehicles such as 401k, IRA, and investments vehicles that possess a diversified mix of holdings. This reinforces the habit of Paying Yourself First (see separate blog post).
- Become & Stay Educated: Now that your finances are starting to improve and are on auto-pilot…start reading personal finance books. I highly recommend reading “Rich Dad Poor Dad”. No other book has been more important to me regarding personal finances.
- Never Stop: stay committed and keep learning. Try to increase automated earnings into investment vehicles and try to determine more ways to increase your earned income. Continue to educate yourself as technology continues to change the game.
- Enjoy the Ride: Calm down. Relax. Know that you are on your way.
Closing
I am so thankful that I came across this vital single component of building wealth. Not just for my sake, but for everyone reading this and everyone I keep in touch with. Everyone who knows me well knows that I do not mess around when it comes to saving money and building wealth. They think I take it too far. Although they may be right, I do not care because I am committed. Because I am indeed committed, the question isn’t whether or not I will be rich, the question is how soon. In no way, shape, or form is this supposed to come across as pompous or arrogant…I am just trying to convey that average individuals with desires and commitments can accumulate mass riches…especially if you are young. And again…building wealth is not complicated. It does not require a vast knowledge of the stock market or the real estate game. The key is to take action and stick with it.
Do not be like everyone else. Do not make excuses. Make sacrifices.
Redefine.
-James