WBYM: Well Below Your Means to gain Wealth Beyond Your Measure (Overview)
This topic deals with personal and business financial conservation. It’s the ability to live on less than what is currently made, to squeeze a nickel till the beaver poops. It’s certainly not a popular topic among those who profess to know how to build riches.
Too many people believe that building wealth requires a source of great revenue, the ability to generate six or seven figures of annual income (or more). People are constantly looking for the great “fix” to their financial situation. They look for any investment that will multiply several times over in a short period of time. Investments like: crypto currency, IPO’s, purchasing or building an APP, any “get rich quick” scheme, or a business type venture that returns “lotto” like results. This is a myth perpetrated by those who either don’t have wealth but are teaching it, or have wealth but have not proven themselves as someone who retains wealth through difficult times. Sometimes, drivers even think that becoming an independent operator is that easy path to great riches, that “pot of gold opportunity” complete with its own FOMO (Fear of Missing Out).
Building wealth is first and foremost an exercise in restraint, then an exercise in adding/multiplying revenue. Nobody can out earn financial irresponsibility for long periods of time, short maybe but eventually it ends in a financial face plant.
There are many ways to reduce expenses: living without is probably the key. But the question is, what to live without and what is essential. It’s the study of needs verses wants, a controversial and divisive topic at the very least. Many perceived “needs” is simply a personal desire. The ability to objectively determine one from the other is probably the greatest financial life hack. Whether it’s living in a super small basement apartment, driving a rust bucket beater or eating rice and beans with a bottle of tap water while on the road, the combinations of restraint doesn’t matter the bottom line is the only thing. Living “Well Below Your Means” is one of the first disciplines to master in building wealth long term. It’s an ability even billionaires need to maintain.
What you have mastered in restraint is not as important as what causes your downfall? So, what is your financial nemesis? What is your plan to conquer your foe?