How to Start Creating True Wealth

The most common questions I have been asked in my past 15 years as a CPA are "How can I make more money? How do I start creating wealth? How can I create passive income? When is the right time for me to invest?"

There is no doubt that a financial statement or tax return can depict the growth and health of your business or personal finances. However, I've realized over the years that a financial statement or tax return can't show you the next steps you need to take in order to start generating true wealth.

The most important and often missed step in the journey of generating true wealth lies in your ability to define what 'wealth' means to you.

Defining What 'Wealth' Means To You

Your definition of wealth will be different than how others define it. You may view wealth as starting a business, spending more time with family, retiring at a certain age, sending your kids to college, increasing your income, or paying off long-term debt. Wealth is more than a dollar sign. Essentially, wealth is an accumulation of scarce resources. Where in your life are resources scarce? Do you need more time? Do you need more emotionally availability?

I often challenge people to start defining what wealth means to them by analyzing their life in terms of things that they wish to change. Wealth can be absolute or relative! Defining what it means to you is the first step to achieving it.

Defining Your 'Wealth List'

Your 'wealth list' is a list of everything you want that would make you truly 'wealthy' as you defined it above. I strongly believe that to accomplish anything, you must write it down. After years of working with and observing wealthy individuals, I recognized that they were consistent and diligent about writing down what they wanted. There is something about writing down what you want that makes it real and not simply an idea. I challenge you to write down everything you want. Allow yourself to roam freely through the wants, desires, and hopes of your mind. Nothing is too big or too small.

Defining Your 'Wealth Blueprint'

Your 'wealth blueprint' is the roadmap for how you are going to achieve the items listed on your 'wealth list.' Once you have defined what you want, you have to determine how you are going to get there. You can compare your journey of building wealth to building a house. Building a house requires a blueprint. If you miss a step in the process, it can be detrimental to the creation of your home. Creating true wealth requires you to implement a system to reach your goals.

I wanted to help my clients, family, and friends develop a true 'wealth blueprint' that they could follow to help them generate true wealth, despite how they defined wealth or what their current income situation looked like.

I've spent years reviewing thousands of financial statements and tax returns. I've consulted businesses and individuals that have generated massive amounts of income. I've observed their behaviors, trends, and strategies.

Wealthy individuals consistently save to invest in passive income. They achieve success in a rapid and consistent fashion. They take massive action and always plan for taxes. They leave nothing on the table and give generously at the same time. These experiences have led me to realize they had four things in common. I define these as The Four Foundations of Wealth Creation. You can use these foundations of wealth creation to build your 'wealth blueprint.'