The Honest Truth About Building Wealth

Now I know, the title is pretty straightforward but hear me out on this. After reading this article, you'll probably learn something new about building wealth for your future and it could very well help you in your journey as well! Without further ado, let's get right into it!

Cutting Down On Bubble Tea and Starbucks Isn't Going To Make You Wealthy

Every personal finance book or wealth guru will always emphasize that you should cut down your spending. They will advise you to track your expenses and recommend you cut down on "luxury spending" like taking grab over public transport or cut down on your bubble tea spending.

There is, of course, some truth to this as it is important to live within your means and understand what you are spending your money on. But here's the truth, cutting down your 3 cups of bubble tea a week isn't going to make you a millionaire. Yes, you're saving around $15 a week but it isn't going to make a huge difference.

So what should you do if you wanna start building your wealth now? Let me share with you, in my opinion, the 3 most important things you should do to build wealth.

Invest With A Long Term Investment Horizon

This is the most obvious one yet many don't do it. The idea of getting rich quickly with all the market craze and online gurus promising get rich quick schemes has badly influenced many people. As a result, most of these individuals actually end up losing all their money and have to start their journey all over again.

Source: Reddit

Individuals are much better off just investing in broad market ETFs and even Robo-Advisors over a long period of time through Dollar Cost Average (DCA). Investors who invest with a long investment horizon, say 10-20 years, are bound to do very well because, over the long run, the market will always move up due to many factors such as inflation and such.

I'd definitely recommend Robo-Advisors like StashAway or Syfe because the returns are far better and the overall portfolio is more diversified as compared to buying a bunch of ETFs which could be hard to keep track of.

Build Multiple Streams of Income

Source: Elegant Themes

Moving onto my 2nd point, I believe it is key to build multiple streams of income in order to become wealthy. Based on statistics, the average millionaire has 7 streams of income, ranging from rental income, side businesses, joint ventures, stock market investments, and royalties/licensing income. If you realize something about these streams of income, is that they are mostly passive. You simply invest your cash into a cash-generating asset and let it work for you. This is really important as this allows you to free up more time to increase your active/earned income.

Many people think that building multiple streams of income is difficult and unachievable but I'm here to tell you that it's not! I currently have 5 streams of income excluding my earned income. They are Ad Income (Website), Side Business Income (Dropshipping), Affiliate Income, Dividend Income, and Capital Gains. Although the income amount is not huge, the amount does accumulate fast and can soon be reinvested back into my investments to compound my gains further!

I believe that the most important thing is not to build multiple streams of income that generate a ton of cash but rather, build passive streams of income that allow your money to work for you.

Start Networking Aggressively

My last point is one that isn't really talked about but I believe is very important. Networking is definitely one of the key ways for people to start building wealth. Networking allows you to meet people with great ideas that can share and mentor you with their experience. Networking aggressively can also help you land better job opportunities or be exposed to greater investment opportunities that are hard to come by.

So start networking aggressively. Build a Linkedin profile and start connecting with everyone you know. Classmates, colleagues, even relatives! Just keep on building connections and soon you'll realize the true power of networking. You can even join communities and groups, meet new people and share common topics/ideas together. You'll be amazed at how much this helps you in growing your knowledge.

Final Thoughts

I hope that after reading this article, you learned something new and it has given you a new perspective on building wealth for your future. Perhaps it might even inspire you to start now. The best time to start was yesterday, the next best time to start is right now!