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How Do You Define Wealth Building?

By Charles Hopkins Published 09/20/2007 | Finance
Many people define wealth building in many different ways. How you define wealth building can have a big impact on your net worth and how you live your life. A few simple distinctions on wealth building can dramatically change your life. For many people just the very thought about wealth building can seem overwhelming and unattainable.

For the average person when they think of wealth building, they focus only on controlling their spending and coming up with a budget. For these people they will never become truly wealthy in their lifetime. If you do have a budget though, you should be congratulated. You are further ahead than 90% of other Americans. But if you truly want to get ahead, you need to do more.

Another way some people go about wealth building is by trying to pay themselves first. The recommended amount is at least 10% of you gross income. Again, most people become overwhelmed by this seemingly high figure of 10%, not knowing that it is okay to start small.

If you arent paying yourself first, try to start out by paying yourself at least 3% of your gross income, and then gradually try to work your way up to 10%. Each time you get a raise or a bonus, add that to your savings as well.

Paying yourself first is just another term for saving money. But in order to become truly wealthy you need to increase your income, not just try and save an extra couple of dollars out of your paycheck. So how do we go about trying to increase our income?

Well, there are many ways to increase your income. The easiest way is to simply get a part time job and work more. While working more for someone else will increase your income you need to think bigger and also if you are a typical American you are already working over 50 hours a week.

What you need to do is start working for yourself. You can do this by either starting a business, buying a business, or buying a franchise. No matter how you do it, try to build a system so that once the business is up and running you can be free to do other things.

No matter how you define wealth building it is important to start right now. Time is one of the greatest factors when it comes to wealth building, so use it to your advantage.