To those unfamiliar with finance, the term “investing” often invokes feelings of confusion and angst. If you are like I was, your thoughts often race to movie scenes of men pacing the New York Stock Exchange floor, doing lots of research with lots of complicated terminology. We are often left feeling overwhelmed at the thought of becoming wealthy, and what’s worse, is that we stop ourselves from getting started.
You see, contrary to popular belief, generating wealth for yourself is a process that can be understood by anyone (including those without financial degrees or math skills). This is because wealth creation is simply a process in which an individual uses a portion of their income toward something that is expected to generate greater wealth for them in the future.
The “something” I’m referring to here is, of course, an asset.
Assets are resources that are vital to anyone who wants to sustain, grow, or build wealth. They come in a variety of forms, but a few you may be familiar with are cash, stocks, bonds, real-estate, and businesses. The best part about these assets are that many of them are readily accessible (and affordable!) through investment accounts.
So, our focus on wealth shouldn’t be about fancy financial frameworks or terminology, but rather, how much of our paycheck goes toward purchasing assets.
After all, acquiring wealth is not an expertise game… it’s a spending game. The more room you can comfortably make in your paycheck to spend on assets, then the more room you make to build wealth.
So, how does one adequately manage their spending? Below are some of the most undervalued necessities of a disciplined spender:
- Commitment: Your financial goals are only as good as your commitment to following through with them. Part of mastering financial discipline lies in your acceptance that the journey won’t always be easy. Learning to budget, changing your current lifestyle, setting new boundaries with friends and family, etc. can all be difficult experiences to navigate. But going into your wealth building journey with the mindset that you will remain committed to your financial goals (no matter how difficult they may be) is a vital component in getting more control of your spending.
- Gratitude: At the end of the day, we spend a lot less when we are thankful for what we already have. Creating a daily routine that incorporates gratitude will train your mind to appreciate all of the things that you have in life which will help cease your desire to overspend. This is arguably one of the most important habits of a disciplined spender.
- Patience: Neither your financial situation nor your spending behavior will change instantaneously. Whether it relates to your investment accounts or your spending habits… it takes time before you see results. Be patient and kind to yourself throughout the process. Don’t aim for perfection, aim for progress.
- Reflection & Adjustment: When you think about it, why are you in the financial situation that you are in? Does your income constrain you? Your spending habits? Your lifestyle choices? Understanding where you can improve your quality of life is the first step to actually doing it. After all, you can’t fix what you don’t face. Reflect on your reality and adjust accordingly.
Now, you may be wondering to yourself what your next best step is. Thankfully, in this day in age, you don’t have to look far when it comes to getting started. You can begin on your own or with the help of licensed professionals that can guide you through the process (P.S. check out Bank of Hope’s Wealth Management Services to learn more about that).
It is normal to feel uncomfortable stepping into unknown territory, especially when your money is involved. What’s most important for us to remember is that your financial journey cannot begin without you. The tools and resources to acquire wealth are readily to available to you at this very moment. So ask yourself, if you haven’t started already, why not now?
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This article was written by Alexis Howard, founder of financiallybrave.
The views and opinions expressed in this article do not necessarily represent the views and opinions of Bank of Hope.