3 Ways to Create More True Wealth, New Science on Living Longer and Healthier, Creating Multiple Income Streams
Business
3 Ways to Create More True Wealth
If True Wealth = Free Time, how do we create more of it? Great question. There are many ways to build more true wealth. I’ve broken them down into 3 big categories: Spend Less, Make More and Do Less.
I hate to start this series with spending less, but – as you’ll see in a minute – it is the right place to start. So, how can we spend less and why should we start with spending less on our journey to true wealth.
Why Spend Less?
Spending less is simple, but not easy. Kinda like the solution to weight loss – eat less. Just like eating less to weight loss, spending less has a really cool multiplier effect. Let’s look at eating less first. For every calorie I take in, I need to burn it off. Simple, but let’s look at the time required to burn off that extra food. My body burns about 1,700 calories per day if I do not exercise. So, if I can eat less than 1,700 calories in a day I will be losing weight without spending any time on exercise. Getting closer to my goals without spending extra time is very good and promotes the creation of True Wealth! Note: I tend to enjoy exercise and find that it has multiple benefits besides calorie burn, but we are talking about creating the straightest path to a goal. If the goal is to lose weight, eating less is that path.
But what if I need a little treat to get me through the afternoon blahs? I need a Snickers! Well, the “regular” size Snickers bar will run me about 270 calories. I can eat that thing in less than 30 seconds and then I have an extra 270 calories to burn off. How long will that take? If I can jog a 10-minute mile, it will require about 30 minutes of jogging. 30 seconds of eating just turned into 30 minutes of exercise and that does not include all the time it takes to actually get out for a jog and back to work! Get the picture? Eating less is the most time efficient way to lose weight. It is difficult, but it is clearly the straightest path to your weight loss goals!
Now, back to spending less. As a general rule, every dollar you spend is used after the government takes their cut of your income. Therefore, that item did not cost you $1, it cost you $1 x (1 + your tax rate). If you can save $1 in spending, you just made not just $1, but $1 x (1 + your tax rate). So, a penny saved is not a penny earned. It is a penny times 1 + your tax rate earned!
Similar to eating. If you don’t spend it, you don’t have to earn the money to pay for it! Then consider the fact that we buy so much on credit today. It’s not like saving up cash for a big one-time purchase. When you spend cash there is no purchase “hangover.” You wanted it, you bought it and now you can enjoy it or realize you really didn’t need or want it that much and sell it for anywhere from 50-75% of what you paid for it! You did not create a long-term encumbrance when you paid with cash.
Buy it on credit and you get to pay for the purchase and the interest over time. You are now a slave to that purchase. Working extra hours to make the payments and interest on the item that is quickly losing its luster (and certainly its value).
I hope you can see how spending less is the quickest route to true wealth. Now, how do you actually start spending less? Here are 3 quick ways to get started.
Know – You can’t manage what you can’t measure. If you get to the end of the month saying “Where did all the money go?” then it is time to find out where all those little dollars ran off to!
At my house, we use Mint because it is free and easy. I used to use Quickbooks, but spending a Saturday catching up on QB every 3 months was seriously jeopardizing my ability to be joyful so Jill took over budgeting and put us on Mint.
Let Mint (or whatever software you like), tell you where your money is going then you can start making changes.
Start Small – Change management experts tell us that the smaller the change, the more likely we are to stick with it. Don’t promise yourself that you are going to work out an hour per day when you haven’t seen your gym shoes in months! Same goes for budgeting. Use the knowledge you created in the first step to make small changes that will not be too difficult to stick to.
Eat out one less time per week, cancel a gym membership that you are not using, reduce your cable package. Find some little changes that you and your spouse can stick to. Mint will provide the transparency you need to track your progress.
Multiply – This is where it gets fun! What to do with those extra dollars that are left over at the end of every month? Invest them! You can start by investing them into creating an emergency fund that will save you from debt and stress when your next financial emergency arises – and you know it’s coming! You can then start putting the extra cash towards your debt and start what Dave Ramsey refers to as the Debt Snowball! You pick your smallest debt and start putting those extra dollars towards paying it off early. Once you’ve paid off that debt you can take all the money you were paying towards it and direct it towards your next smallest debt. As you pay off each debt, your “snowball” gets bigger, you get excited by the wins you are seeing and you can pay down each subsequent debt that much faster!
You know the best part of paying down debt? Every dollar you pay down on your debt gives you two wins. One – you are in that much less debt. Two – you will never pay someone interest on that borrowed dollar again. A sweet 2fer!
Next week, we’ll dive into some great ways to “Make More” as we continue our journey towards True Wealth!
Health
Live Longer and Healthier
Ugh. How I hate it when science backs up what I already know but do not want to do! The scientists behind two major longevity and health studies have come together to help us understand how to live a longer, healthier life. In reality, we all knew this but maybe a little more evidence will help us make the changes we need to make!
Below is the summation of the research. You can learn more here.
“So if you want to live longer and have a higher chance of being disease-free in old age, restrict your calorie intake and eat a balanced diet containing natural, healthy food.”
Life, Fun, Whatever
Creating Multiple Income Streams
I have been following Jeff Rose for some time now and I really like where he is coming from and most of his advice. My first job was in wealth and financial planning and I learned a lot during those 3 years. Especially how to not lose money by trying to beat the market! Jeff follows that philosophy has created a great business by helping people do better financially.
That is what I got out of this great article. Help more people and you will earn more money. Jeff has developed multiple avenues to help people with his expertise. Check out his article and I bet it will help you generate some great ideas on how you can use your skills to help more people and, in turn, make more money.
For me, I help people build great businesses and True Wealth through those businesses. Right now, most of my income comes from one to one advising. This blog is a second way I help people, my weekly newspaper column is a third way but neither are income streams yet! As I continue to grow I believe I can help more people at a lower cost by advising them virtually and through courses. It takes a ton of work, but if you know what your life’s work is (mine is helping Christian leaders building amazing businesses that show Christ’s love to the world), then you can dive in and not worry about the fact that it will take time. You just keep plugging and slowly but surely you will find ways to help more people. And, the more people you help, the more income you can generate.
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