How to Turn Income into Wealth

Listen to the episode here!

On this week’s episode of the Health & Wealth Power Hour, I had the pleasure of sitting down with financial expert Timothy Clifford . Timothy has a wealth of knowledge from decades in the financial industry, and we dove deep into what it takes to build long-term wealth. From his early days on the trading floors of the Chicago Mercantile Exchange to his current role helping people make smarter financial decisions, Timothy has seen it all.

One of the standout messages from this episode was something I think we can all relate to: “Making money does not equal having money.” It’s a simple yet powerful reminder. Too many people are out there earning good money, but they struggle to hold onto it or grow it into lasting wealth. It’s a lesson I’ve learned myself, and Timothy brought great insight into why this happens and how to avoid the same mistakes.

Smart Decisions Over Time

Timothy explained that the real difference between people who have wealth and those who simply make money comes down to a series of small, consistent decisions. As he put it, “People who have money make different decisions than people who make money.” These decisions aren’t necessarily big or flashy; they’re often subtle adjustments in thinking and planning that, over time, can lead to drastically different outcomes.

The key takeaway here is that building wealth isn’t about making one lucky move. It’s about playing the long game—making strategic choices and sticking with them over years, if not decades.

The Power of a Simple Financial Plan

Something else that really stuck with me from our conversation was how important it is to have a financial plan. Now, this doesn’t need to be an overly complex, 40-page document. Timothy emphasized that a financial plan can be as simple as a one-page document that outlines your current financial situation, your goals, and the strategies to get there.

What’s great about this approach is that it allows you and your partner, if you have one, to be on the same page. And when you both understand your financial picture, it’s easier to make informed decisions together.

Diversification and Seeking Counsel

We also touched on the three key habits of people who build wealth:

1. They have a plan – Whether simple or complex, they know where they are financially and where they want to go.
2. They diversify – They don’t put all their eggs in one basket. Diversification is essential to managing risk and maximizing potential returns.
3. They seek counsel – This one can be hard for some people, myself included at times. But seeking advice from trusted professionals and even informal sources is crucial. Timothy pointed out that people who build wealth know how to ask the right questions and gather multiple perspectives before making important decisions.

Seeking counsel doesn’t just mean hiring a financial advisor; it also means asking questions and gathering advice from friends, family, or even colleagues. The more input you have, the better decisions you can make.

Common Financial Mistakes

One of the most common mistakes Timothy sees is people not maximizing their 401(k) contributions. If your company offers a match, make sure you're contributing enough to get the full match, but don’t stop there—try to contribute as much as you can up to the annual limit.

Another common pitfall is the belief that a house is an investment. While owning a home can be a good financial move, it shouldn’t be viewed as your primary retirement asset. As Timothy reminded me, you need a place to live, so the money tied up in your home isn’t easily accessible for retirement.

Planning for a Predictable Retirement

We talked about the anxiety many people have around outliving their retirement savings, and Timothy explained that the people who build true generational wealth often have multiple streams of income. Whether through investments, consulting gigs, or side ventures, they create a predictable and stable retirement plan.

If you’re only relying on one source of retirement income, like Social Security or a 401(k), you’re putting yourself at risk. Having diversified streams of income not only helps you avoid running out of money but also gives you peace of mind.

Small Changes, Big Impact

The big takeaway from this episode is that wealth isn’t built overnight. It’s the result of making small, smart decisions consistently over time. Whether it’s setting up a simple financial plan, diversifying your investments, or seeking advice from others, these steps can have a significant impact on your financial future.

If you’re ready to take control of your financial journey, I encourage you to take stock of where you are today and start thinking about where you want to go. Remember, building wealth is a marathon, not a sprint.

To learn more from Timothy Clifford and hear his full insights, make sure to catch the episode. And for additional financial resources, you can visit Timothy’s site at https://www.planassist.com.

Visit hwpowerhour.com to subscribe to the podcast and not miss out on any of our future episodes. Thank you for reading!