Building Wealth Is Like Weight Loss: One Step at a Time

Building wealth doesn’t have to be complicated, but you’ll need self-discipline and a plan to meet your financial goals.

It turns out that building wealth is a lot like weight loss. To lose weight, you need to burn more calories than you consume. You don’t need a fancy gym or personal trainer. Just eat fewer calories than you expend each day.

While a million and one brands want to sell you the secret to retiring a millionaire tomorrow, the basics of building wealth are pretty simple.

Spend less, save more and invest responsibly.

Building Wealth Through Spending Less and Saving More

Ok, so it isn’t always easy to go to save money. Just as those baby back ribs call you to break your diet, easy credit card offers constantly call you to break your plan for building any real wealth.

The most important part of a good diet is building the habit of eating right over a period of a few months. Those cravings aren’t just going to go away. You have to work at a diet, so your brain no longer associates certain foods or overeating with pleasure.

Financial dieting is the same; you need to keep to a budget for months to retrain your brain that you don’t need a 3,000-square-foot house or that new tech gadget just to be happy. The good news is that once you form good spending habits, for about 66 days, according to research, your brain will be on wealth-building auto-pilot.

• Focus on a budget’s four most important parts and set realistic financial goals. Make your budget easy, and you’re more likely to keep it.
• Take advantage of all the easy money you can like these 16 easy money tax tips to help save money without sacrificing too much.
• Take an honest look around the house, and you’ll find all kinds of “stuff” that you don’t need or even want. Turn that stuff into financial freedom and put it into your wealth plan.

Just like eating less to lose weight, your spending plan may not initially save you a ton of money, and you might hit a few hurdles along the way. Stick with it, trying to save a couple of hundred dollars extra a month and build up to saving even more money as your good spending habits develop.

Building Wealth Through Investment

Some people can sit on the couch, eat potato chips and still look like Greek gods. Others can get away with almost no exercise if they watch what they eat. Then there are some that need to hit the gym five days a week just to remain moderately healthy.

It’s the same way with building wealth. Some lucky few can spend their family’s fortune and never worry about the poor house. However, most of us need to grow our money through investment if we’re ever going to build enough wealth to meet our financial goals.

While investing pundits on TV and the net would like you to believe otherwise, building wealth through investment doesn’t have to be complicated. You don’t need to get the latest stock tips or strike gold on the next big thing.

• Investing basics are pretty easy, just set up a schedule of regular deposits and invest across a group of stocks through an exchange-traded fund. Don’t worry about “the market” or if prices are up or down.
• Understanding what kind of return you need to meet your financial goals is the first step in creating your investment plan. Starting without a plan is like going on a trip without knowing where you are going.

You won’t retire rich overnight by sticking to a reasonable investment plan, just as you won’t shed 100 pounds in a week on a weight loss program. You also won’t see your wealth vaporized during the next financial meltdown. Combine a smart plan of spending less and a reasonable rate of return for building wealth, and it won’t take long for you to realize how easy it actually is.

Previously published at Wealth of Geeks.

By Joseph Hogue