Minimum Wage Wealth

Creating and destroying wealth comes down to 3 simple concepts. If you abide by the 3 concepts, you will always be wealthy. If you do not, you will always live in poverty. The question is: which side do you live your life on?

In the Austrian School of Economics, many senior fellows and leaders of the movement discuss the same process that create strong, wealthy nations for those that follow, and ruin for those that reject them.

It’s a very simple concept, yet few people follow it closely:

1. Make Money. Obvious concept, right? Many Americans work hard, day in and day out. However, there are always opportunities to increase your income. Consider 2nd jobs, odd jobs, or side projects (like blogging) that can earn income. Even if it is sporadic, it may be worthwhile. I am considering another job at $8-9/hr to fill in downtime that I may normally spend on entertainment like surfing the internet. Every little bit helps. Also, consider selling items that you rarely if ever use. Material items are meant for our enjoyment. If you aren’t using them, you are losing the value they bring. Check your closets for clothing or other items and consider selling them via a yard sale, consignment store or E-Bay. At a minimum, you have more space at home. At best, you’ve earned yourself hundreds of dollars you previously did not have.
2. Spend Less. If you feel that it’s an impossibility to earn more money, then the next option is spending less. We are constantly inundated with ways to spend our money. Movies, games, clubs, phone packages, foods, and frivolous activities can wreck your budget. It is important to take ownership of your enjoyments: is that $50 a month cable bill really worth living paycheck to paycheck? Is going to the movies and spending $30 on tickets and food really going to be meaningful 10 years down the road? Will your grandkids care if you saw ‘New Moon’ on opening day? These are important things to consider, as discretionary spending – things not associated with living – has ravaged Americans’ wealth over the past few decades.
3. Create Wealth. When you make more money, and spend less, you will find yourself in a position of having more money to utilize, but what to do? Fend off the idea of spending on gadgets and gizmos because you finally have money. Learn to save and invest your money, as well as pay off any owed debts (which are a cause of major financial problems – as we’ve seen over the past year). You create wealth through savings and investments. Interestingly enough, we always hear how ‘The top 1% of Americans have 95% of the wealth’. Although this is true, they don’t make 95% of the money. They actually make 60% each year – a much smaller amount. The big difference is the fact that the wealthy save much of their money, and invest it. This is the key to creating wealth: What works for Warren Buffet and Bill Gates works for the average American.

What savings does is show that you are able to live and save back money – proof of your work. When you do this, you are able to build capital that can be invested into earning more and more money. This is how the filthy rich make money: They earn, invest, and make more.

Of course, the road to poverty is the exact opposite cycle. We will be presenting that in our next series.

The way to wealth depends on just two words, industry and frugality.

Benjamin Franklin (1706-1790) American statesman, scientist and philosopher.