Here’s a truth about wealth building that some financial experts and government regulators don’t want you to know: You can’t get rich by scrimping and saving. Despite what so many books tell you, the “miracle” of compound interest works only for the very few – those rare birds who begin investing for retirement when they are in their twenties and never falter. Most of us aren’t so consistent.
Life’s vicissitudes interrupt our best intentions and the savings accounts that were once plump and juicy eventually dry up and turn rail thin. How are your wealth-building plans going? If you stopped working tomorrow, could you live comfortably from your savings for the rest of your life? You don’t have to answer that question. Unless you are one of those very unusual characters who has been saving every spare penny for years, you are already behind where you should be in terms of building wealth with compound interest.
So if compound interest won’t do it, what will? What changed my life had nothing to do with compound interest. My miracle was simpler and more profound: I figured out how to make a lot more money. This is an unavoidable truth. Unless you can boost your family income to a six-figure level and keep it there for a good amount of time – a minimum of seven to 15 years – you’ll never be able to retire.
If your family income stays in the low to middle five figures, you’ll almost certainly spend the rest of your days working hard and struggling to pay your bills. This is a hard pill to swallow if you are currently making a meager income. And it’s a hard truth to admit to if you have a vested interest in government welfare programs (including Social Security), insurance companies, pension plans, and the annuities industry. But it needs to be said. Wealth building is, in some ways, like dieting.
Though many people make it complicated, it’s really not that hard to figure out. If you want to lose weight and keep it off, you have to do two tough things: Eat better foods and exercise more. And if you want to get wealthy, you have to do two things too: Make a good deal of money. Save an awful lot of it. Every year, dozens of new books are published that promise to show you how to get thin without eating better and exercising more. Most of them are rubbish.
Those that make sense end up telling you to do what I just said: Eat better and exercise more. The same is true for books on wealth building. So many are written, but so few are willing to tell you the truth: You’ve got to make more money and keep your spending in check. Anyone who’s ever spent any time trying to diet knows that losing weight, and keeping it off, is a difficult, long-term, life-changing process. Why should getting wealthy be any different?
The good news is this: Increasing your income – even substantially – is very possible if you first develop a financially valued skill and then “sell” that skill to the business you currently work for (and/or use it to develop your own business). It then becomes much easier to quickly save enough money to ensure a comfortable and financially secure retirement. This is all clearly explained in detail in my new book “Automatic Wealth: The Six Steps to Financial Independence” (just published by Wiley Press).
The book is a step-by-step blueprint that will allow you to start living richer immediately – and achieve total financial independence in seven to 15 years. (Maybe much sooner.) I show you how to develop those financially valued skills that you need in order to dramatically increase your base income. I show you how to build wealth by converting your passions, hobbies, and interests into additional, solid, automatic streams of income.
And I show you how to wisely leverage your investments so they grow faster than you ever imagined possible. “Automatic Wealth” will help you make money. And if you follow the suggestions faithfully for a reasonable period of time, you’ll some day – probably sooner than you think – discover that you are wealthy. You’ll also have earned the ability to make more choices . . . including the choice to stop working. If you are interested in enjoying that kind of independence, the important thing is to get started on a wealth-building plan. Now.[Ed. Note. Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]