Tip #174 - You Don’t Need To Be An Entrepreneur to Be Wealthy. There are many people in the world who make lots of money by starting their own businesses or inventing something great. These people are often go-getters and have a natural entrepreneurial spirit. Being this type of person can lead to a successful business and can be a great way to make a lot of money. But is that the only way to become rich? What if you don’t have the entrepreneurial spirit? What if you have no desire to start a business, take risk, or talk people into buying encyclopedias? Does that mean you are stuck at the bottom of the wealth ladder? NO!
Anyone can become wealthy. You don’t have to start your own company or risk a lot of money to do so. You can do it quietly, little by little. A person in an office job making $60,000 per year can become wealthy. Maybe he will never be Bill Gates (but really how many entrepreneurs will be either?), but he can build up his savings and acquire wealth if he works hard at it. Some of us are not cut out to be business owners or risk takers. But you can still become rich. Really. If you earn $60,000 annually, live as if you earn $40,000. Put the $20,000 away year after year. After 10 years you will have $200,000 plus interest. If that money is earning 8% interest per year, you would have about $300,000*. If you save that amount each year for 20 years, you will have close to a million dollars. Seriously. Now imagine if you start that kind of savings when you are fresh out of college. Think about what you will have after 30 years or around the time you are 50 years old (about $2.5 million) or after 40 years (about $5.5 million). Those are some pretty impressive numbers for someone making $60,000 per year. No entrepreneurial spirit required.
Of course, not everyone makes $60,000 per year. Or you might not be able to consistently save $20,000 per year throughout your lifetime, but you can see that it doesn’t really take a go-getter, risk your shirt off your back attitude to become wealthy. It takes a desire to accumulate money by living on less than you earn and putting that money away regularly. Between that and the “magic” of compound interest, you can become rich.
In Real Life (IRL) – I have never been a big risk-taker. I am always afraid of what I might lose. I don’t think I have it in me to start a coffee-shop or even go door-to-door selling something. That is just not my personality. But I am willing to work hard to make money. Even if that means working for someone else. My income may not be as big as the person who started the company I work for, but the risks on my end are much smaller as well. That’s the way I like it. So what I have done is work hard for twenty years. Even when I was making under $20,000 per year in 1989, I put away money month after month. When I stopped working a couple of years ago, I was making $60,000 – hardly a wealthy person’s salary, especially in the DC area where I live. But I was still putting money away. In twenty year’s time, we have saved a few hundred thousand dollars – most for retirement, some for our children’s education, and some for emergencies.
Anyone can do this. Just live on less than you earn and invest the difference – year after year. No need to start a business. No need to put out any funds. No need to try to be a salesperson. Just a bit of discipline and most anyone can accumulate wealth. Really.
*I used the savings calculators at bankrate to help with the interest rate computations.