how is wealth created

How Self-Made Millionaires Create Wealth

Do you want to know how is wealth created? There are many Self-Made Millionaires with incredible stories admired by entrepreneurs and investors alike. Names like Warren Buffet, Steve Jobs, and Mark Zuckerberg all epitomize the level of success that most business professionals could only dream of attaining.how is wealth createdBut the truth is that there are common themes in their stories, and the blueprint for amassing substantial wealth has been well documented in their stories as well as others. Most wealthy people in developed countries aren’t wealthy by heritage. They’ve acquired their wealth within their lifetime by adhering to some pretty easy to understand concepts about building wealth.

Take Control of Your Personal Finances

Pretty much anyone interested in building their wealth knows this is huge. Too bad many of those same people never seem to stick with it. Mastering your personal finances takes extreme emotional intelligence. You have to battle your ego, and make sure that your yearning to be popular doesn’t overtake your goal of becoming financially successful. You have deny yourself instant gratification by pocketing the money you’d normally want to blow on a good time or an unnecessary luxury.

Mastering your personal finances is pretty simple in terms of behavior. Make money, spend less, save, and avoid debt. Once you make a certain amount of income, it’s really not that hard…..unless you can’t control your emotions.

The best defense to impulsive decision making is to immerse yourself with people and environments that nurture your goals. Reading financial books and articles. Attending networking events. Keeping a journal. Writing goals. It’s all about setting yourself up for success before you get faced with the temptation of bad decisions.

 

Up Your Income

That can mean building credentials in order to get a higher paying salary. But that’s going to get harder and harder as tuition costs increase while wages remain stagnant. Many times increasing income can simply mean that you decide to do something that others simply aren’t willing. That can mean devoting yourself to becoming a great salesman. That can mean working 70 hours a week instead of 40. And the biggest payoff of course comes from becoming a successful entrepreneur.

Even many great investors actually got started by starting their own businesses. While Warren Buffet is known for his skills as a stock investor, he actually has an impressive track record as an entrepreneur. In fact, it was his ability to start his insurance company Berkshire Hathaway that has allowed him to amplify his profits as an investor.

If you can’t increase your income, you simply won’t have enough to set aside for investing and compounding your wealth…….which is where the real money gets made.

Channel Your Income into Passive Income

Warren Buffet created his insurance company in order to leverage other people’s money, and generate profit. This influx of capital can then be used to invest in assets like stocks, businesses, and real estate which generate passive income, and compound his capital.

This is what sets apart your average high earning professional from the moguls we all hear about. Somebody who makes $200K, $300K, or even $500K is going to have a very comfortable life. There’s no question about it. But if all they do is spend and save their money, they’ve pretty much maxed out their potential.

On the other hand, if they can set aside half of their income every year, and then invest it into assets that double or even triple every decade, it can make the difference between being worth several million, to being worth hundreds of millions or even billions.

So the moral of the story is to start controlling your income an expenses. Then increasing your income in any way possible. And finally pouring your extra capital into investments that compound your wealth exponentially.

If you don’t think this is possible……..well we beg to differ.

About The Author

herbertkoehler

I am a college drop out who found my passion as an investor. I love the many facets of finance, investing, and business. But even more than that, I love sharing what I learn with others.

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