What is real wealth to you? Give that some thought.
For some people it’s a big house, a large bank account, a fancy car, or lots of zeros and commas on their net worth statement. Those can be nice…but they are actually indicators of monetary wealth.
I believe that real wealth is the ability to live life on your own terms. It’s about having the money and the freedom to do what you want, when you want, with the people you want to be with and — most importantly — to enjoy each moment.
Money alone is not real wealth, it’s a tool that you can use to create financial freedom and to design your life in a way that makes you feel alive and fulfilled.
Let’s focus on a more complete and holistic perspective on wealth. One that includes financial freedom, a sense of purpose, your legacy, giving back, and living your best life.
Ultimately, this type of freedom means that you’re in control of your finances and your life choices.
As Henry David Thoreau once wrote, “Wealth is the ability to fully experience life.”
If you have completed the RealWealth Assessment™ then you now have a score based on how you rate the level of real wealth in your life.
This article offers ways to help you improve that score — which actually means improving your level of satisfaction in the most important areas of your life.
If you have not yet completed the RealWealth Assessment™ you can do that here.
So let’s take a look at 10 ways you can create even more real wealth in your life.
1. Develop Your Mindset
This is number one for a reason. Because a shift in your mindset can change your life. How you think affects your wealth and your life more than any other factor.
So first ask yourself, do I have a fixed mindset or a growth mindset?
People with a fixed mindset believe that their personalities and abilities are inborn, fixed, and unchangeable.
People with a growth mindset believe that their personalities and abilities can be developed and strengthened by way of commitment, persistence and focused effort.
Your mindset is basically a lens through which you view the world. It can alter how you see things and how you think about life. Your mindset is made up of your beliefs, perceptions, and your attitude toward things that affect your thoughts and your decisions.
Growth-focused people make a deliberate effort to optimize their mind, body and spirit. They do what they need to do to operate in a heightened state of mind and they continuously learn new techniques to get back into a peak state when they feel themselves slipping.
It’s about investing your time and energy on the things that are within your control — exercising to keep your body optimized and reduce stress, feeding your body with healthy fuel that produces the energy you need, saving, investing, and making your finances work for you. It’s also about surrounding yourself with good people who support you and filling your mind with positive information that inspires and helps you grow.
A mindset shift can have exponential benefits for creating real wealth in your life. Realizing that a small shift in perception can transform our reality helps us look at things a different way.
Epictetus said, “People are not disturbed by things, but by the views they take of them.”
Though you won’t actually change reality (or maybe you will), you can truly change how you interpret it and thus how you feel and how you act.
Developing your mindset is about being open to growing and getting better. Because when you get better, everything around you gets better.
2. Clarify your vision
The main reason many people don’t live the lives they want is because they don’t know what they want.
Having a clear vision for where you’re going inspires you to wake up each day with a plan, purpose and drive. So how do you clarify the vision of where you’re going? It’s about putting your attention on your intention.
Close your eyes and imagine time-traveling into the future in ten years or even twenty years. Imagine arriving at the home of your future self. Where is it? What does it look like? Imagine meeting your future self. How does your future self greet you? What do they look like?
Ask your future self, “What do I need to do to get from where I am to where you are?” Ask your future self any questions you might have. Maybe even imagine spending the day with your future self. What do they do? Who are they with? What do you see for your future?
This can be a valuable exercise to help you discover what you want, what you value, and what you can do today that your future self with thank you for.
To create consistent growth, commit to becoming your best self through an optimized mindset, clear values and a purpose that’s bigger than where you currently are.
Commit to getting clear on your vision. Research how to clarify your vision and goals online, read books and continue to imagine your future self.
For more about clarifying your vision check out this video from a talk I’ve given at our RealWealth live events for the past 15 years called “The Focused Investor”. In it, I lead you through the future self-exercise I mentioned above. It can be helpful in getting clear on what you want and who you want to become.
If you want to be truly wealthy then it’s important to create a vision and a plan. People who care about real wealth don’t leave their portfolios or their lives to chance. They would rather focus on a clear, tested strategy that’s based on consistent, persistent discipline rather than just hoping for the best.
3. Focus on Financial Freedom
Financial freedom is when your passive income exceeds your expenses.
Money is simply a medium of exchange and a store of value. No matter how much you make or how much you have, money will always be a tool for trading your time. Once you have it, there will be a time you have to trade it for something else you want that can give you more happiness or fulfillment.
Truly wealthy people invest their money into freeing up their time. Most people don’t seem to value the time they have. Wealthy people want time to spend with family, friends and to make the world a better place, so they focus on building wealth in order to actually buy back their time.
60 percent of Americans live paycheck to paycheck and they make matters worse by abusing credit cards. Most people today buy things and then spend a lot of their time working to pay for them, trading time for money to accumulate more things that don’t build wealth, thus actually decreasing their wealth.
It’s important to remember that people usually don’t become wealthy from their jobs or “working hard.” People become wealthy by investing in income-producing assets.
Wealthy people invest with a bigger picture in mind. They know that when their passive income streams exceed their lifestyle expenses, they have financial independence and time freedom. What this brings in the long-term is flexibility.
When it comes to tracking your financial progress some of the most important areas to review consistently are your income, your expenses, your net worth and — probably most importantly — your cash flow.
The real way to build that cash flow and create financial freedom is to invest in assets — things that put money in your pocket like dividend stocks, bonds, income-producing real estate and systematized businesses.
Income-producing real estate really stands out here because you can actually profit five different ways from rental properties:
- Monthly cash flow
- Appreciation
- Amortization (tenants pay off the mortgages)
- Tax benefits
- Hedge against inflation
It’s important to remember that getting to financial freedom happens in four stages and it usually happens by saving and investing in those assets that bring positive cash flow and consistent returns:
- Cash flow negative
- Cash flow neutral
- Cash flow positive
- Financial freedom
True wealth is not being stressed about money. By staying focused, persistent and patient through those stages — and by consistently investing in cash-flowing assets — you will achieve financial freedom.
4. Build a Team for Support and Expertise
When you expand your vision of where you want to go, then you need a to put together a team of people who can help you get there. Then look at the two main areas for making it happen.
First, what will you do that is your unique strength and that you enjoy doing? Second, step back and think WHO can help me with the other areas with their unique strengths? It’s about accelerating teamwork. Do what you are best at and what you love doing and then hire or partner with others who excel at the other stuff.
When it comes to investing in real estate, key partners can include your bookkeeper, your CPA, your attorney, your real estate broker, your insurance broker, your property managers, and your investment counselor.
Leverage the expertise of professionals and potential investment partners if it means higher potential returns, lower expenses, and more time freed up to do the things you want to do.
It’s important to hire others with the knowledge that you don’t have so you don’t have to invest the time into gaining that knowledge or into doing something that is not your strength.
You don’t have to have the highest paying job to create wealth — just the right plan, team and determination to stick with it for the long-term.
5. Learn, Learn, Learn
Read books, attend classes, do online research, watch videos, listen to podcasts, or take courses that will help you learn and expand your financial intelligence, your outlook on life, your knowledge of people, your understanding of health and just about any topic that will help you live a better life.
Wealthy people are constantly educating themselves about money and investing. Most people seem to escape into entertainment, which is fine as long as it doesn’t take over their life and prevent them from learning and growing.
One of the most important areas to invest is in yourself. Find mentors, join a group of people with similar interests, join a local investing club. I’ve personally invested tens of thousands of dollars into my education over the years. From personal development seminars that have lasted one evening, seven days and even ninety days, to year-long business development and leadership programs. Every dollar and hour I have invested has paid off many times over.
Also, don’t be afraid to look at how you are operating in life. For the past 25 years, I’ve had a professional coach that I speak with every week. Why? Because on my own I can only ask myself so many questions. Having a skilled, masterful coach to ask me the questions I need to be asked helps me notice what’s working, what’s not working, what I have learned, and it also holds me accountable, helping me continue on the path of lifetime growth.
It can be fairly simple to create real wealth. Maybe not easy but definitely simple. Educate yourself, develop your mindset, and invest with a focus on the future. Those are simple concepts that anyone can incorporate into their own lives. It’s just a matter of having the self-discipline to put it all into practice.
6. Nurture Your Relationships
What are the most important relationships in your life? The people in our lives are valuable assets that can add considerable joy, laughter, fulfillment and love. Good relationships require time and mental effort, so it’s important to invest those resources into our most important relationships.
To nurture your best relationships with your family and friends sometimes you have to consider which ones to let go of. Some people are like investments and some people are like bills. It’s important to know the difference.
Just as accumulated possessions and stuff can clutter up your life, you probably have some relationships that need decluttering too. Take a look at all of your relationships, both personal and professional. Which of them no longer serve you? Which can you let go of to free up the time and mental energy to focus on your most important relationships?
And what about your most important relationships? How could they be even better? What could you do to nurture those relationships? Call people more? See them more? Acknowledge them more? Let them know you care?
If you are not satisfied with the friends and family area of your life then you might want to consider a few things:
- How can you make your family and friends feel important?
- What qualities are you looking for in your ideal relationships? (create a list)
- Which of your relationships are draining your energy vs. uplifting you?
- How can you find new quality relationships?
- What can you do to be more giving and caring? (givers gain!)
7. Protect Your Wealth
One of the most important ways to protect your financial wealth is to have passive income streams in place. This can help you whether you are laid off, when you retire, or if you can’t work for whatever reason.
Also, make no mistake – bad things happen to good people all the time. You don’t have to be irresponsible or negligent to get sued. To protect what you have, it’s vital to take some defensive measures, to make it more difficult for creditors to seize your assets in the event you lose a lawsuit, have a judgment entered against you, or are forced into bankruptcy.
There are several important ways to protect your assets ranging from trusts, LLC’s, solid insurance, and proper tax planning.
Some of the key ways you can protect your wealth include:
- Using business entities
- Professional liability insurance
- Personal liability insurance
- Umbrella coverage insurance
- Long-term care insurance
- Life insurance
- Auto insurance
- Homestead exemptions
- Irrevocable trusts
Of course, it helps to have professionals to help with all of that. See tip #4 above “Build a Team for Support and Expertise” to learn more about having the right people to help advise you about proper protection.
8. Take Care of Your Health
Gandhi is constantly quoted for saying, “It is health that is the real wealth, not pieces of gold or silver.” It’s also not stocks, real estate, Bitcoin or fiat currency. If we don’t take care of our health then we lose all the benefits of monetary wealth along with all the other areas of our lives that bring us joy and fulfillment.
Investing in your health can help add time to your life and life to your time.
I’m not saying money is not important. I’m saying that there is a direct correlation between health and wealth. Investing in your health will pay dividends for many years to come.
Here’s why:
- When you are healthy you will be productive longer
- Staying fit and healthy boosts your brainpower and your confidence
- Exercise can cost you nothing (now that’s a great ROI!)
- Health care, medical bills, and insurance can be very expensive
- Exercise has been proven to be the best anti-depressant available
9. Follow Your Purpose
Studies show that having a purpose and living a meaningful life can actually lead to more wealth.
A 2016 study published in the Journal of Research in Personality found that people who have a sense of purpose possessed more wealth than those who feel as though their lives lack meaning.
The researchers found that individuals with a sense of purpose actually have a higher income and a larger net worth than those who feel as though their lives lack meaning.
Even when they controlled for known factors that predict financial success, such as demographics and personality, they found that having a sense of purpose actually made a big difference in a person’s level of wealth.
And this difference in wealth lasted over time. Over the course of 10 years, people who have a sense of purpose continued to have higher incomes and a higher net worth than other people.
The researchers suspect that people who felt their lives have meaning are more goal-focused. Reviewing their long-term goals most likely motivated them to also develop better financial habits.
After all, what are you going to do with the money you earn? You need a purpose beyond accumulating wealth just for the sake of it.
If you aren’t sure what your purpose is, invest some time thinking about what matters most to you. When you visit your future self what do you notice? What does your future self care about? What kind of legacy have they built?
Not only will clarifying and following your purpose help you live a more fulfilling life, it might also help you grow your wealth.
10. Make a Difference and Leave a Legacy
Wealthy people have much more than just a retirement plan. They plan to leave wealth for their heirs and charitable causes for generations to come.They have a strong desire to give back and contribute to the world, to make a difference, and ultimately to create a legacy.
It’s never too soon to start giving back. No matter what your current income level is putting aside a percentage to give back has a powerful effect on your mind and your life.
Giving back can also increase your happiness, strengthen your social bonds, provide feelings of empowerment, and even improve your health.
Helping others activates the reward center of our brain, causing it to release dopamine, which results in what’s known as the “helper’s high.”
Giving back is not limited to financial support. If you want to improve your happiness and build new relationships, volunteering may be your answer. The more you volunteer, the more you connect, and the shared sense of purpose creates lasting bonds between you and others.
Your health can even benefit from volunteering. It actually has a calming effect on the body, just as it does on the mind, slowing your heart rate, decreasing your blood pressure, and lowering stress levels.
Plus, research shows that people who volunteer actually tend to live longer. So giving back is another way to add years to your life and life to your years.
Live Live On Your Terms
Real wealth is about having the money and the freedom to do what you want, when you want, with the people you want to be with and — most importantly — to enjoy each moment. By gaining clarity on what real wealth is for you, clarifying your vision of what matters most to you, and then consistently working on yourself, your finances and your life, you can continue to grow, thrive, feel amazing, give back and leave a legacy.
What is Your Real Wealth Score?
If you have completed the RealWealth Assessment™ then you now have a score based on how you rate the level of real wealth in your life.
If you have not yet completed the RealWealth Assessment™ you can do that here.
