Early in my career, it was my job to conduct interviews with fund managers, investment bankers, financial planners, advisors and directors for the purposes of making yawn-inducing corporate videos. I wasn’t assigned to this role because I was particularly good at it, it was more just because I was there.
So, unfortunately, I didn’t pay enough attention to these wise men and women to be able to tell you what funds to invest in, which bank offers the best interest rates, or how to properly whet your appetite for risk. Sorry. My bad.
But the one thing that has stuck with me is the mindset change from ‘getting rich’ to ‘building wealth’.
If getting rich is about buying the car of your dreams and all the shiny gadgets you can clasp in your sweaty, little paws, then building wealth must surely mean accepting that you can’t take any of that junk with you.
Recently, I found a great saying in an antique book of Greek proverbs (okay fine, it was actually Pinterest) that reads, “Society grows great when old men plant trees whose shade they know they shall never sit in.” I used to believe that the difference between ‘getting rich’ and ‘being wealthy’ came down to having a great idea, or a good name. But what these practitioners of the dark arts of investing all knew is that the real difference lies in how you think about money, and what it can really buy.
Getting rich is easy to think about. It’s something we all dream about doing. And the ‘quick’ part is implicit, because part of the fantasy is the immediacy of it. We like thinking about buying all the petty, useless, stupid stuff we are currently infatuated with, right now (yes, I am still talking about Pinterest).
Building wealth is hard, because we have to overcome this impulsive cognitive bias and be realistic about our own life phases (i.e. our increasingly sloppy descent into old age). It means that we have to accept a lot of hard truths about our own limitations. I hate to sound like your high school guidance teacher, but you’ll probably never make a chart-topping album, write a best-selling book, ‘be discovered’ or create a billion-dollar start-up. I’m not saying that you should give up on all your dreams… but maybe don’t quit your day job just yet.
Letting go of these aspirations as potentially viable income streams might feel like a betrayal to your 16 year-old self, but it can actually be very freeing. Because as soon as you stop dreaming about what might have been, you can start planning for what is actually possible. And what is actually possible is actually pretty cool.
Maybe you won’t ever own a yacht, or a house in Camps Bay, or check your phone from a gold-plated toilet seat, but you know what’s (almost) better than all of those things? Retiring in comfort, sending your children to university, travelling, investing in your own education, taking care of your parents one day, and most of all, not being afraid of the future. Building wealth means constructing a simple life, one that’s free from financial fear, but still abundant in the little things that make us feel rich.
Just like getting fit, there’s no secret to building wealth. There’s no quick fix or puerile celebrity-endorsed product that will change your life in ‘just 14 days’. After you’ve taken an objective look at where you are, and where you want to be, you just need to buckle down and get it done. One gruelling, spread-sheeted step at a time.
But unlike getting fit, you’re unlikely to throw up or pass out the first time you step out of your comfort zone. And anything that doesn’t end in crippling nausea is a ‘win’ in my book.
All of those financial gurus I spoke to had the long-game in mind. They didn’t just want their kids to be better off than they were; they wanted to create a legacy that would allow their grandchildren to also reap the rewards. And maybe even their great grandchildren, and their great-great grandchildren…. You know, assuming the planet hasn’t been overrun by sentient robots in a hundred years.
Sure, building wealth can be hard work, and you won’t see the results immediately. But you’ve got nothing to lose, and only interest to gain.
Whether this means opening a savings account and stashing 10% of your salary in there every month, investing in unit trusts, or just starting small and Googling what ‘unit trusts’ are, it’s up to you to take the actions now that Future-You will want to travel back in time, and high-five you for.
Of course Future-You won’t do that, because he/she will understand the potentially devastating consequences of creating a temporal paradox.
So you’ll just have to take my word for it.
Photo by: John, Takin’ it to the BANK$Y via Flickr, CC BY 2.0.