“A simple fact that is hard to learn is that the time to save money is when you have some.” —Joe More
Building wealth is a front-loaded task. That means if you want to be a millionaire, the majority of your work is done at the beginning of your journey. Over time, you find that wealth building becomes easier as time progresses. Then, quite suddenly, wealth building becomes nearly painless. What often happens is that people find it so difficult in the beginning—and it is difficult—they give up on their financial goals. I will prove to you that if you will just push through the initial hardships, correct your inevitable missteps, and stay with your wealth building program, the process becomes much easier.
You may start out with next to nothing or just be just scraping by. It is a huge chore to get your financial house in order, let alone think about building wealth.
You’ll soon realize that if you are going to build wealth, you will have to resist the conventional consumer culture that is so pervasive in American life. I am not going to lie, this is pretty hard initially. All your friends are spending and doing cool stuff while you seem to be stuck in the everyday doldrums. My wife and I weren’t perfect at avoiding consumerism—few people are. We had our ups and downs, but we found that we continually improved our performance as time passed. Practice did indeed make this task easier.
Long before we reached our written financial goal of $1 million, we’d noticed everything became simpler. Our normal budget, that was heavy on saving and investing, had a bigger day-to-day entertainment and routine expense allotment than our friends’. Our friends made plenty of money, but they were always broke. They had no money for any nonessentials. They were busy paying the bills for all the stuff they had bought over the years. In some cases, they were paying for consumer items they no longer even had anymore. Those items had worn out or had been sold when they no longer brought the family pleasure.
At that point, we also realized we had acquired skills and abilities some of our friends did not possess:
• We learned to invest.
• We understood compounding interest and the concept of “time invested.”
• We had portfolio management skills.
• We practiced financial self-discipline.
• We had financial confidence, meaning we understand now how the money game is played and knew how to win this game!
Soon, we reached a new level on our wealth-building journey—the realization we had enough money. To illustrate, I can remember getting promoted to a middle management position at work. We rolled my entire raise and every promotion and pay raise thereafter right into our investment accounts. We didn’t miss the extra money at all. We were past the point of just scraping by. We felt like we had plenty of resources for living our day-to-day life. We really didn’t need or want anything!
The next milestone we reached was the “crossover point.” This is the point where your investments are making more money for you than you are making at your job. With it, comes the knowledge that you can make much more money in investing than you ever could at work.
Having crushed our $1 million goal we have now moved on to our second goal of $2 million. Now, the process is embarrassingly easy! Not because it seems easier, but because it is actually mathematically easier. For instance, the jump from one dollar to one million is a 100,000,000% increase! That is quite the journey to travel. To get to $2 million, however, we only need a 100% increase. How long will it take your money to double in the stock market? The answer is typically 6 to 9 years. Our strategy now is to just get it accomplished! Although I haven’t yet have the experience yet, the jump to $3 million seems to be the easiest task of all. It is only a 50% increase from $2 million to $3 million.
Below is an estimated summary timeline:*
1. Under 25 years—$1M
2. 6–9 years (projected)—$2M
3. 4 years (projected)—$3M
*(Disclaimer: Of course, there are never any guarantees in investing. These time periods are just estimates and results vary.