Understanding How Wealth Grows a.k.a. “The Positive Wealth Curve”

Three simple tips to start growing your wealth, and what it can do for you!

Understanding How Wealth Grows a.k.a. “The Positive Wealth Curve”

Any person with a stable income can become wealthy. If you have a regular paycheque, and you want to grow your wealth, all you have to do is three simple things:

  1. Set money aside on a regular basis (weekly, bi-weekly, monthly)
    2. Invest it in the stock market
    3. Forget about it

Wealth grows by snow-balling. Start with a small amount like $100 once a month (something that you won’t miss). Six months or a year from now, evaluate how much that contribution is impacting your budget. If you don’t miss it, consider increasing your contribution by another $15 or $20 dollars per month. Keep doing this until your contribution is as high as possible without causing you stress.

The first $100,000 is the hardest $100,000 you’ll ever make. The second $100,000 will be only a bit easier to make. And the third $100,000 will be slightly easier to make. Over time, you’ll have enough accumulated that your investments will easily make $100,000 (and more) for you.

Your goal is to get to the point of no return. You can retire when you get to the point of no return. The point of no return happens when your investments are growing faster than the money you need to withdraw to live on. Some people are born into a family that has grown their wealth to the point of no return. Some people get there in their 30s. Some people get there in their 50s. We all hope we get there by 65. And for some people (those who refuse to set money aside or have spent it on something else) never get there.

For people who set money aside every month, the point of no return sneaks up on them when they aren’t looking for it. It happens when people get used to living within their paycheques and accept their lifestyle for what it is. They go about their day and think they’ll never be able to retire. They think they will have to work forever. But – if they’ve been setting small amounts of money aside every month since their 20s or 30s – somewhere in their 60s they can stop working AND withdraw more from their investments than they need to live the life they want. When this happens, they will have achieved their goal: they will be wealthy.

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