I’m going to describe my tips for a wealthy life but first, I’d like to talk about attitude.
The most important piece of advice I can share regarding wealth is that no matter what your present circumstance, you must have an appreciation to enjoy what you have right now. Having rubbed shoulders with poor missionaries as well as millionaires, this is a lasting truth to happiness: appreciate what you have while you strive to improve your position. Learning to be content in all circumstances increases your ability to enjoy your life.
Money is transient. It comes and goes. Wealth does not guarantee happiness, nor does wealth necessarily solve problems. Wealth merely provides flexibility, freedom and opportunity. Wealth is a process. It’s a discipline. It’s long term. It’s different for each person. Wealth is reaching your level of financial comfort and living well within that income level.
We must have a certain capacity to enjoy life as it is right now – our family, our friends, our church, our jobs, our foods, our car, our home, our health. The reason is simple: if we’re always looking at the future hoping to some day attain a certain level of income or possessions or savings, we will most likely miss the rich experiences of the present day’s blessings.
So first of all, appreciate what we have today.
Next, today’s big tip is – SAVE!
The single, most important thing that we can do to build wealth is save. I don’t care if you only save $1.00 from each pay check or from each birthday gift – just save some of it.
When I was little, my mom took me to the local Savings and Loan at the mall and opened an account for me. Anytime I got money for Christmas, for my birthday, or for doing yard work, she took me to the bank and I’d deposit something. Back then, I might have gotten a check from an aunt or uncle for $10. I’d decide how much to deposit and the rest I kept. After a couple years, I had a several hundred dollars.
When I was in the Army, we barely had enough money to get through the month. I think I was making around $500 a month since I was married and living off the military base. My rent was $165. My car payment was $100. Food, doctor bills for my kids and gas for the car didn’t leave much, but each paycheck I’d deposit $5 into each of my kids college funds. That was all I could afford. I didn’t have a retirement fund then, or a personal savings account of my own. Just the 3 accounts for the kids college. I could see that my little deposits weren’t going to pay for all of the kids college, but it would pay for a bunch of it. If I could, I’d increase my deposits. If not, they’d have enough to help with tuition and books.
When I got out of the Army, I worked several jobs trying to make ends meet. I did not collect unemployment or get food stamps – and I never investigated whether I might even qualify for it – I just worked. I cleaned the mall at nights with a friend. I worked as a carpenter’s assistant with a man I’d met at church. I got a job at a bank as a teller. I joined the Army Reserves so I could get a little extra monthly pay. All together, I was making less than when I was in the Army, but I still made monthly deposits into my kids accounts, usually $1 and no more. But I kept doing it.
I finally got hired as an air traffic controller, making just enough to pay the rent, pay for the car, food, doctor visits for the kids and for the first time, occasionally a pizza and a movie! Or an extra tank of gas to take the family to the beach or amusement park. Still, I made my deposits. I eventually opened a personal savings account too and began saving for myself.
As my income grew, my savings increased. I worked up to 10% of my income going to savings. Whenever I got a raise, I’d increase my savings allotment by a few dollars too. As the kids grew and our family expenses grew too, I still saved. It took a long time to actually get our heads above water, so to speak, but eventually my income did increase as I stayed with the same job and progressed to bigger airports. I opened retirement accounts and contributed to them, one at a time. We received some inheritance money and though we spent a lot of it, we still saved a portion of it.
When the kids grew, they had college funds, graduation gifts, money for weddings and vacations. Sure there were setbacks and yes, we did dip into savings to handle car repairs, family emergencies and school clothes. Yes, we overspent at times. But I payed off the credit cards and hopped right back on the savings plan and built those accounts back up again.
As I neared retirement, I calculated how much I would get from my pension plan. Then for the last 5 years of my employment before I actually retired, I lived on that amount of money and the rest went into savings. That way, I was already used to living on my retirement wages. In the meantime, my savings were growing stronger than ever. Just before I retired, I was actually living on close to 50% of what my paycheck was.
Entering retirement, I had set aside a good chunk of money that would allow me one full year to do whatever I wanted, without even depending on my monthly pension check. Then, once the final calculations were done and I knew exactly how much my retirement check would be ( it took 5 months for the finance department to finalize the amount), I set up an allotment to save 10% of that income too!
I’m a regular guy. I am an employee, not a business owner. I’m not mega-wealthy and I’m not at the poverty level either. The point is this – SAVE! Save what you can. Increase your deposits when you can. Live on less than you earn.
Don’t miss your payment to yourself. Save, and don’t touch it! Don’t have your savings account in a place that is easy to get to. Set up a savings account at the credit union or a different bank than you normally use – that way you will be less likely to take money from it.
Save for a house down payment. Save for a car. Save for retirement. Save for college. Save for Christmas gifts. Save for an emergency fund. Save for a vacation.
The number one tip for wealth is SAVE.
Do it every payday. Do it with every gift you receive.
Next: Credit Cards