How I Conquered the Four Roadblocks to Wealth
Starting out in the lower ranks of the economic ladder here in the United States, I've been fortunate enough to embark on a financial journey that propelled me to the top 1%. Along this journey, I confronted and overcame four significant obstacles. These barriers, frequently hold many individuals back, particularly immigrants and minorities, from accumulating wealth.
These mental barriers stem from misconceptions and misunderstandings holding many people back. Let's break them down and create a clear path to your financial success.
Barrier One: "I don’t have money to invest."
Often, this barrier is more about financial priorities than actual fiscal ability. Regardless of income level, everyone has what I call "wealth potential" - the money that remains once your bills and expenses are paid each month. The key is to not spend more than you earn.
Another way to say this is to make sure a portion of your income is yours to keep. Make investing a priority no different from how you prioritize paying your electricity or cell phone bill.
Regardless of whether you're earning minimum wage or a six-figure salary, the rule is the same: to accumulate wealth, your expenses must be less than your income. If you spend more than you earn, amassing wealth becomes difficult.
Barrier Two: "I don’t know how to invest."
Many of us weren't educated about investments growing up or in school. But, using this lack of knowledge as an excuse to avoid investing is not permissible. No one is born knowing how to swim, drive or ride a bike, these skills are acquired by learning. The same applies to investing. Here’s the secret, it’s easy to learn how to invest.
In our connected world, access to knowledge has never been easier. However, you have to make sure you find an instructor or mentor you can trust. I started The Investing Tutor to fill this knowledge gap and offer a platform to make investment education accessible. My goal from the beginning has been to help individuals build million dollar portfolios over their lifetime.
Barrier Three: "Investing is risky; I can lose money."
Indeed, investing involves some level of risk. But then, life is full of risks. Nothing good and worthwhile is risk-free. Often, our fear of risk stems from a lack of understanding. While it's true that markets fluctuate, portraying all investing as a high-risk is a misconception.
Look at the S&P 500, which tracks 500 large U.S. companies. Since 1957, it's averaged an annual return of around 10%. This demonstrates that over time, the stock market has never lost money.
Consider driving a car. It carries risk, but learning how to drive reduces the risk and we still do it because of the benefits it offers. Similarly, with the right knowledge and strategy, anyone can become a confident investor.
Barrier Four: "I need to save or pay off all my debt before I invest."
Many believe that they need to be debt-free or have significant savings before they can start investing. While well-intentioned, this belief can be counterproductive.
Consider two hypothetical people: Jane and John. Jane starts investing $300 monthly at age 18 and stops at 25, but lets her investment grow until she's 65. John waits until he's 40 to start investing $1000 monthly until he's 65. Both investments grow at 10% annually. It’s worth noting that Jane will end up with approximately $1,545,739 while John reaches approximately $1,180,164.
Despite Jane investing significantly less money and for fewer years, Jane has more money than John, thanks to the power of compounding interest and STARTING EARLY.
Financial freedom is not achieved overnight—it is built through consistent effort, a willingness to learn, and an openness to change. Overcoming these four barriers is the first step towards growing wealth and securing your financial future.
To guide more people on this journey, I launched The Investing Tutor. My mission is to provide the knowledge, tools and strategy for successful investing. For anyone who is ready to break through these barriers and secure your financial future, I offer personalized tutoring. By investing in your financial education, you're laying the foundation for a lifetime of financial freedom. Remember, the best time to start was years ago; the next best time is now.
Disclaimer: The information provided in this article is for general informational purposes only and should not be construed as financial or investment advice. It is not intended as a recommendation or solicitation to buy or sell any securities or other financial products. The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any other agency, organization, employer, or company.