Getting rich is hard. But it is also simple.
The hard part is the discipline. The focus required. Maintaining “get rich” habits for years and even decades. And especially: ignoring the million and one opportunities you have to lose your money and slip in the wrong direction.
The process itself is simple. And in fact, it boils down to one rule, in two parts.
How to get rich: spend less than you earn, and hold on to the rest.
Like many of the biggest, most important lessons in life, this is simple.
Too simple, in fact. Which is why most folks pass it over in favor of the latest “get rich quick” gimmick.
And note: I’m NOT against getting rich quick. In fact, I think it’s much better than getting rich slowly. However, getting rich quick is far less certain than getting rich slowly.
Almost anybody who can follow some pretty simple advice can get rich slowly.
Getting rick quickly is definitely possible, but it requires either extreme luck or taking specific actions that will attract money to you fast.
So first, let’s talk about the first dimension to the rule above, the surest way to get rich — albeit, slowly.
The man you’d NEVER think is a millionaire…
I have an acquaintance that is a millionaire. Short of financial catastrophe (which he has carefully guarded against), he will have much of his current wealth when he dies — if not more.
He quit working years ago, well below the age of 65.
He wasn’t a business owner though. Nor was he a high-powered doctor, or lawyer, or any of the other professionals who you might think of as having the chance to grow this level of wealth.
He had a good-paying but very unexciting job, that was definitely more blue-collar than white.
He lived in the same house for most of his adult life, although he did plenty of work to grow it with his family.
He drives an older vehicle, that’s definitely NOT luxury.
He dresses casually, and lives with very little excess “stuff.”
He and his wife are very happy with the lives they’ve created for themselves. It’s not luxurious, but it’s comfortable.
They’re actually living on a bigger budget now than they ever have, and don’t want for anything. When they do want to purchase something, they do it.
How did this guy get rich?
Simple. Even though he never earned a ton, he made a point early on of paying himself first. He saved at least 10% out of every paycheck, and took it out before he paid any bills.
He and his family lived on less than 90% of their income, and in fact also saved another chunk for “rainy days.”
Which meant that at any given time, they were likely living on something more like 60% to 80% of their income.
So if there was any unexpected expenses, they’d cover that out of the “rainy day” fund, so they’d never have to touch that first 10%.
This doesn’t seem like much. But over time, it builds. And, you get better at it. If your income goes up, you can maintain living expenses and save more.
In your first 10 years of doing this, you might save the equivalent of 2-years’ income.
In your second 10 years, you save the equivalent of 5-years’.
In the 10 years after, you save even more.
With even a very moderate return on your savings and investments (as long as you don’t LOSE money), you can reach 60 or 70 with plenty of money to live off of for a very long while. Especially if you’re able to focus on putting your money to work for you, producing income, so you don’t have to touch the principal.
And because he got smarter about making his money make money, and even having the money his money made keep making money for him (compound interest), he did very well for himself.
The man you know is a millionaire…
I have another acquaintance who is also a millionaire, and if you know him, you know it.
He’s done very well for himself financially. He’s the opposite of blue collar. He lives in a very nice house, and drives a very nice car.
He eats at nice restaurants, and enjoys many luxuries.
I have a a feeling he and the other gentleman mentioned above wouldn’t get along all that well. Or at least wouldn’t have all that many common interests.
This man also has more wealth than he will ever need — in fact, if it’s well managed, he has more wealth than his kids will ever need.
And he accumulated all this wealth by following all the rules of the previous gentleman, plus one more.
This points to the second dimension of the “get rich” rule, arguably as important as the first.
Yes, this gentleman also paid himself first. He also focused on spending less than he made, and saving the rest.
But he did something more. He didn’t stick with a J-O-B for most of his life. He asked, “How can I MAKE more so that I can save even more?”
He figured if it’s all about saving a portion of your income, the bigger income you have, the more you can save.
And in fact, this gentleman didn’t get rich slowly. He figured out the principles of wealth-building through business and entrepreneurship, and got rich rather quickly. And continues to get even more rich, quickly.
He got on the long road to growing rich, but managed to accelerate his progress by increasing his income.
You can follow either example, as long as you follow the rule…
The simple and unassailable rule about getting rich is that you must spend less than you earn, and hold on to the rest. (Notably, “holding on” doesn’t just mean saving it today, but not losing it through dumb stock market gambling, etc.)
Increasing income can be an important factor in this, but there are plenty of folks with very large incomes that create a lifestyle for themselves that makes it nearly impossible to hold on to what they make.
It’s a bit like the old tale of the tortoise and the hare.
The hare should be able to win any race with a tortoise, as it has speed the tortoise will never match. But the tortoise knows it will get to the finish line by continuing to take one step in front of the other.
In the story, the tortoise wins, because the hare was so confident in its speed that it slept through the race.
But in life and gathering wealth, the only thing that matters is if you make it to the finish line.
You can choose the tortoise method, and with time and focus you can have all you’ll ever need. Or you can try to be the hare, and accelerate your income (through things like learning effective marketing and business-building) — just as long as you remember it’s crucial to constantly be making progress toward that finish line.
And frankly, most folks I know who’ve grown substantial wealth have started as tortoises, and become more hare-like as they’ve gathered more experience. Once you have the foundation of wealth-building in place, it’s only natural to want to find ways to accelerate it. However, it’s not true the other way — it’s very hard if you start making money fast to go back and develop the discipline of saving. (Which is why most lottery winners blow it all within a few years.)
My advice to you? If you’re not already doing it, find a a way to live off 90% of your income this year — and make it a necessity by taking your 10% savings off the top, before you start paying others’ or deciding where to go out for dinner tonight. And if you are already saving 10%, perhaps you can focus on saving more this year — either by increasing your income, or by saving a bigger percentage, or both.
This is the one true and proven and universal and unassailable wealth-building breakthrough.
Yours for bigger breakthroughs,
Roy Furr
