Entry 56
The crazy simple formula to be wealthy

Building sustainable wealth for the average folk involves doing three things well:

  1. Spend Less
  2. Earn More
  3. Build Wealth Wisely

That’s it. Today I will talk about the first point – spending less.

Spend Less

We all started with roughly almost the average amount of privileges. We went through roughly the same education system, and judging by the trend, a large proportion of the people work towards a minimum degree in university.

What differentiates people are their spending patterns.

The wise ones

  • Spend within their means. If they earn $1,500, they won’t spend $2,000.
  • Are conscious about spending and have a spending plan. Often, budgeting is used so they know where they can funnel their income. They seldom encounter an emergency spending that catches them off guard.
  • Sell old stuff before buying new. There is a conscious effort to sell items that are obsolete. They think thoroughly before buying something and ensure they get good value from buying it. Note that value does not mean dirt cheap items but quality items at an acceptable price.
  • Will not borrow to pay for things that do not build wealth. Using credit cards or loans to boost spending will mean not knowing what  you need to cut in the future to fund purchases that don’t add value.

Spending less matters. The less you spend the more you can channel to build wealth.