Why the Perfect Time to Save and Build Wealth Never Comes
I’m going to say something that will challenge almost everyone that isn’t aware of it, and that is a job will never be enough for building wealth, and those that think they can get wealthy by getting an increase in pay, are in for a big surprise, because it doesn’t work.
In saying this, I’m largely talking about the Western world, as those living in countries like Japan and China do have significant savings, and they put it away at whatever level they’re at in wages, at least for the majority of them.
The secret to savings and building wealth will never be getting a higher wage or salary. Why? Every time someone gets a higher wage or salary they move up what they consider the economic ladder, and they will buy a more expensive car or home, which eats into whatever benefit they got out of the raise they received. Other items can of course be included with that, but a car or home will be the largest expenses paid for, and those will be bought using debt, which the higher loan will result in a higher payment. It’s as simple as that, and it’s a proven lifestyle choice of most of those living in the Western world.
Don’t get discouraged if you don’t make as much as others, as high-end professionals participate in the same economic behavior, including doctors and lawyers, who live from paycheck to paycheck like many other people do, just in a more expensive home and driving a more expensive car.
I bring all this up to say that you don’t need a larger check to get going on savings, because more than likely, not long after you get it you’ll end up going to a better car or home, which will bring you right back to where you were, with the exception of the car or home.
You may say, “but that means I’ve improved myself.” You would be wrong with that assumption, based on the mortgage fiasco over the last several years where people ended up in homes they couldn’t afford.
Remember, when it comes to savings and building wealth, it’s not the size of the paycheck but the consistency of investment over a period of time that makes it all work.
Whether you’re faithful in putting away $50 a month or $500 a month, if you do it over a period of time without changing your habits, you’ll end up with a nice chunk of money. Many times we hear about people with very low incomes putting away over the length of their lives and leaving millions to people or charities as a result. It wasn’t the size of their paycheck but the size of their commitment that made that possible.
Is this to say a larger paycheck can’t help you? No. But it means that the majority of people take a larger paycheck and spend it by moving up to the next level. If you get a larger paycheck and put it away at levels you have been, of course you’ll build your wealth far quicker than you would have otherwise. What I’m saying is you’ll be in the majority if you have the discipline to do that.
What I’m trying to get you to take away from all of this is if you focus on the size of your paycheck, you could end up using that for an excuse to wait or develop habits of getting what you want when you want at the expense of building up your savings and wealth.
Waiting for your paycheck to get a certain size won’t work because of the habits you’re developing. Once it gets to a certain level you can be sure you’ll wait for the next increase as well.
Don’t get caught in that trap. Make a plan and commit and work with it. If you get more income coming in, at that time adapt the plan, and do the same over and over again. Waiting for the perfect income level never works, because that time never comes once you start to look at finances that way.
Tags: saving strategies, Savings Tips
