how to be rich

Building wealth can be one of the most exciting and rewarding undertakings in a person's life. Aside from providing a more comfortable day-to-day experience, substantial net worth can reduce stress and anxiety by freeing you from worry about putting food on the table or being able to pay your bills.1

For some, that alone is enough motivation to start the financial journey. For others, it's more like a game, and their passion for wealth building begins with their first dividend check from a stock they own, interest deposit from a bond they acquired, or rent check from a tenant living in their property.

While there are countless articles dedicated to individual techniques and strategies for building wealth and becoming rich, the advice here focuses more broadly on the philosophy behind how to become wealthy. Considering these points can help you better understand the nature of the challenge you face, as you set to the task of accumulating surplus capital.

Change the Way You Think About Money
One reason that many people never accumulate a substantial nest egg is that they don't understand money or how it works. This is, in part, one of the reasons that the children and grandchildren of the wealthy have a so-called "glass floor" beneath them. Just by way of which family they're born into, they receive knowledge and networks that allow them to make better long-term decisions—often without fully realizing how they're benefiting.

No matter the household you grew up in, the key is to push to move past selling your labor (work) to making your money work for you. Each dollar you save is like an employee. The goal is to make your "employees" work hard, and, eventually, they will start making their own money. When you have become truly successful, you no longer have to sell your labor, and you can live off of the returns on your assets.

Make it a goal to create or acquire cash-generating assets that will produce more and more funds every day—which you can then redeploy into other investments.

Understand the Power of Small Amounts
One of the mistakes most people make when trying to figure out how to get wealthy is that they think they have to start with an army of funds. They suffer from the "not enough" mentality: “I don’t have enough money to invest.” They believe if they aren't making $1,000 or $5,000 investments at a time, they will never become rich. However, armies are built one soldier at a time—so too for your financial arsenal.

You don't necessarily need to become frugal, but small funds can eventually become millions of dollars, as long as you see the potential and start saving.2

With Each Dollar You Save, You Are Buying Yourself Freedom
Money can work for you, and the more of it you employ, the faster and larger it can grow. Along with more money comes more freedom—the freedom to stay home with your kids, to retire and travel around the world, to quit your job. If you have any source of income, you can start building wealth today. It may only be $5 or $10 at a time, but each of those investments is a stone in the foundation of your financial freedom. Once financially independent, you're no longer tied to a job or employer; you're free to do what you want because you're creating your own income.

Building Wealth Takes Time
Some people are reluctant to make a wealth-building plan because they don't want to wait 10 years to be rich. They would rather enjoy their money now. The folly with this type of thinking is that most of us are going to be alive in 10 years. The question is whether or not you will be better off 10 years from now than you are today. Where you are right now is the sum total of the decisions you have made in the past. Why not apply that mindset to decisions you can take now to yourself up for success in the future? Your life reflects how you spend your time and money.

Consider Becoming an Owner
One of the big intellectual and emotional hangups people seem to have when they aren't exposed to wealth is making the connection between productive assets and their everyday life. An investor understands, on a visceral level, that if they own shares of a company such as liquor and beer manufacturer Diageo, and someone around them takes a sip of Johnnie Walker or Guinness, a portion of the money they paid for the drink will make its way back to them in the form of a dividend. With just a single share in Disney, an investor can watch guests stream into Disneyland, knowing that they enjoy their share of any profits generated from the theme park.

One of the strategies of the wealthy is to use their income to acquire productive assets their friends, family members, colleagues, and fellow citizens partake in. They make money (albeit, indirectly) every time you take a bite out of a Reese's Peanut Butter Cup, drink a Coca-Cola, or order a Big Mac. If you've ever taken out a student loan or borrowed money to buy a house from a bank like Wells Fargo, you've sent Wells Fargo investors real cash.