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How To Create Wealth: The Smartest Path to a Million Dollars
By Dr. Steve Sjuggerud, President, Investment U
Tuesday, May 6, 2003: Issue #236
“I’ve got $2,000, Steve, and I’m ready to invest and start creating wealth. How should I invest it? I was thinking of…”
I get this question, or one like it, almost every day from Investment U subscribers. And while I can answer it directly by suggesting a specific investment, I’ve found that this one question is really just the tip of the iceberg for a lot of you.
Typically, what you’re really asking is how do I create wealth? How can I make enough money to never have to worry about finances again? How do I retire when I want to? Or how do I make enough money to get what I want out of life?
Let’s be honest. Chances are you’re not going to turn that $2,000 into a million through an investment recommendation that I – or anyone else – could give you. But surprisingly, the answer to those deeper questions may be even simpler than asking about that single $2,000 investment
How To Create Wealth: A Millionaire In 5 Steps
A friend of mine retired a multi-millionaire while in his 30s. He grew his own business to over $100 million a year and sold it. But he got bored in retirement. He’s now back in business, and has built yet another business up to over $100 million. According to him
“Becoming rich is a matter of making certain decisions and practicing certain skills, none of which is difficult or complicated
“You can create wealth and acquire a multimillion-dollar net worth by doing just five things:”
1. Get to work an hour early.
2. Develop and then perfect a financially valuable skill.
3. Use that skill to earn an above-average income.
4. Spend less than you earn.
5. Invest your savings smartly.
When I consider the world of investment possibilities out there less than 1% in the bank less than 4% if you tie your money up for 10 years and an overvalued stock market I see a tough time to be an investor.
I promise to turn you into as successful an investor as I can. But $2,000 into a million is a tall order. And I only specialize in investing – which is only ONE of the five things above Unless you are already comfortably retired, you need to seriously consider implementing the other four, right away
It worked for my friend. And it has worked for many others who he has mentored. Let me share a few quotes from my friend about each.
Build Your Wealth by Committing to These Four Steps:
1. Get to work an hour early.
“By getting to work early, you can do all the little things that put you ahead of the pack. You can make extra contacts, learn useful skills, take time to write an impressive memo, polish off a report, etc If you do it right, this will be the most productive part of your day.” My friend sometimes refers to it as “compound effort.” Like compound interest in investing, the rewards are small at first, but in time, your value to your business has increased extraordinarily.
2. Develop and then perfect a financially valuable skill.
“To put yourself on track to make the big bucks, you must get yourself into the money stream of your own company In business, a valuable employee is one who can make a critical contribution to the bottom line Selling is a financially valued skill. So is producing profits. So is the ability to create growth. Other skills – making things run smoothly, eliminating mistakes, balancing books, etc. – are valuable to a business, but they are not as highly valued when it comes time to determine how much of the money pie goes to you Do everything you can to help your boss produce a better bottom line.”
3. Use that skill to earn an above-average income.
“If you are making less than $75,000 a year now, it’s almost certainly because you have not perfected a financially valued skill. Plying a financially valued skill toward a business you work for or a business you own (or both) will definitely create wealth. Part of that wealth should go to you. Ask for it. Beg for it. Demand it.”
4. Spend less than you earn.
“One day I had an idea. I took out a sheet of paper and tallied up my net worth. Despite earning $50,000 more that year than my previous highest salary, my net worth was still less than $10,000. I made myself a simple promise. I said that from then on I’d recalculate my net worth once a month and that I’d do everything I possibly could to make sure that each month’s total would be larger than the month before.
“It was as easy as that. I decided simply to get richer one month at a time. That simple promise had a profound impact on the way I thought about myself, my job, my business relationships, and wealth building itself. It made me see – almost instantly – that many of my habits (including some of my spending habits) were financially unhealthy. Plus, it gave me an underlying determination to get a little bit richer every day”
The “How To Create Wealth” Conclusion: Take Action Today
To get to where you want to go, you must do more than read about it you must put the plan into action. To create personal wealth, you’ll need to commit today to doing all of the following:
- Set your alarm an hour earlier.
- Identify the financially valued skill you are going to develop.
- Commit to spending less than you earn.
- Make it a habit to recalculate your net worth on a monthly basis. Then promise yourself you’ll do what it takes to grow that bottom line.
Don’t dismiss these techniques because they’re simple. They’ve worked for my friend – more than once and me and thousands of others who this man has mentored.
You have nothing to lose. And a lot to gain.
Good investing,
Steve
- Building Wealth: Five Steps Towards Becoming a Millionaire
- Building Wealth: The First Step Toward Gaining Your Financial Independence
- The Philosophy of Money: What It Means to Be Truly Wealthy
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