Building Wealth (Not Making Money) Reduces Stress and Makes You Happy

They say money doesn’t buy happiness because a lot of people who make a lot of money don’t know how to handle it properly.

Most people who make a lot of money are LAW (Low Accumulators of Wealth). For every 1 dollar of income they bring in, they spend 2. They are constantly working to “keep up” with new cars, the most expensive home the bank will roll for them, and everything that goes with that. This is a very high stress way to live and no one could possibly be happy living like this. These people are not much different than drug addicts. Every new thing they buy that will serve as a status symbol for all of their friends and colleagues to see is like a fix. It feels really good for a short time. Then they crash. Or worse they see someone else with something newer, better, shinier.

At the very most you get a 90 day reprieve with a new major purchase like a car.

These LAWs will tell you they are happy. They’ll post in social media that they are living the dream. But deep down inside they are a train wreck and they’ve lived such a big lie that they have no one to talk to about it.

Talk about lonely and unhappy!

Then there are HAWs - High Accumulators of Wealth (and yes I am using my own version of the terms used in The Millionaire Next Door , which I highly recommend reading). Mine make more sense to me.

It’s not rocket science. Whether you make $1,000,000/year or $30,000 it doesn’t make a difference. It’s struggling to pay the bills that causes stress, and stress is what causes most people to be unhappy. Experience stress for prolonged periods of time and it can have serious consequences.

And it’s hard to be productive when you are under stress. How focused do you think you really are? Not very I’m sure.

Let’s be clear that a “millionaire” is not necessarily someone who makes $1,000,000/year, but someone who has a net worth of at least $1,000,000. There is a big difference, and most millionaires make a lot less than $1,000,000/year.

So what do you do if you are stuck in the rut of struggling to pay your bills?

Here’s a basic plan:

10% is saved. No matter what. You pay yourself first.

70% is for living expenses (Operating expenses if this is for a business)

20% is to pay off debt.

And as you pay off your debt you continue making the same payments, but now they go into your savings as an additional investment. As you build that savings you will notice that you have a reaction - you will feel a tremendous weight lifted because you are finally moving in the right direction. Every time you eliminate a payment of some kind, set up an automatic transfer to your savings on the same day of the month that, that payment was coming out. Turn in a car when the lease is up, assuming you don’t need to replace it, redirect that monthly payment. I turned a Toyota Camry in at the end of its 3 year lease in 2021. I had no need for another car. Still have an old Highlander that is all paid off. And I hardly ever go anywhere beyond a 5 square mile radius where I live here in Burbank, CA.

Most people somehow think they don’t deserve to save money when there is debt to pay off, but this is the thing you should do first. You’ve heard the expression 1 million times - pay yourself first.

Next take a really close look at all of your expenses. Cut anything that isn’t absolutely necessary. This is just temporary - to lighten the load and make it easier on you. You can add things back later if / when / as you need them.

Nerdy Pro Tip #1: Report your debit or credit card lost or stolen. This forces the bank to update all of your payment information and send you a new card # with new SVV and expiration. This will cause all of your subscriptions to fail. Then you fix only the ones you want to keep and let the others go!

I used to do this every year in Jan. Then I started implementing Tip #2:

I have a Capital One Credit Card , and Capital One has the Eno browser extension. This let’s you create virtual cards on any website where you purchase online. Each virtual card is ONLY good on the site it was created for. So now all I need to do if there is ever an issue on a site (like a breach) is delete that virtual card. Capital One also has great rewards ??.

Based on the book, The Millionaire Next Door I created this wealth calculation template . Use it to calculate what your net worth “should” be according to their formula.

Click here =? https://nerdyurl.com/wealth-calculator

Don’t let this discourage you if you aren’t anywhere near what the calculator says. Most people won’t be. Use this as a target. Set a goal of reaching this. Look at this number every single day as a reminder of where your focus needs to be. This practice alone will dramatically improve your focus because you will be very clear all day every day on whether or not what you are doing at any moment is getting you closer to that target.

Building wealth is not some mystical process. It’s simple really. Years ago I was sharing with a colleague that I wanted to do a course on how to eliminate debt and his answer to me was what I would expect from him (a bit of a curmudgeon) - “You don’t need a course for that. Just make consistent payments and don’t add to it, and it will be paid off in due time.” He was 100% right, but of course... easier said than done.

Saving money to build wealth works much like paying off debt (which is a big part of saving money and building wealth). It takes a consistently applied plan and daily focus. Any level of focus less than daily is too easy to forget. In my 97 & Up program we have a very detailed goal setting template the breaks your annual goals down into various streams of income, and then into a daily target. Then each day you key in how much came in that day. That process takes just 1 minute each day, but every single person who has done it and stuck with it for any length of time has reported that they see an increase in their revenues.

It’s not magic.

It’s the product of focus.