6 Steps for Building Wealth


By Caroline Wetzel


steps she may find helpful for building her wealth. Step 1: Understand Wealth


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The first step in building wealth is to know what being wealthy entails. Being wealthy is not the same as being rich. There is no specific income level associated with being wealthy. Buying a home in an affluent zip code or wearing certain clothing does not make you wealthy. Being wealthy means understanding what is im- portant to you in life and being able to pay for it. Regardless of how much income you make, when you are wealthy you spend less than you earn, you save regularly, and you manage/pay off debt in cal- culated ways, according to the benefits you expect to receive over time. When you are wealthy you have control over your finances and confidence that your savings and spending behaviors meet your immediate needs and are setting you up for success over time.


Step 2: Desire to be Wealthy While many people may claim that they want to be wealthy,


not everyone is ready or willing to take steps necessary to build


hat is the greatest gift you can give the woman you love this Mother's Day? Give her information she can use to set herself up for financial success. The following are six


wealth for themselves. Building wealth can be tough for many people because it often requires focus, discipline, and deferred gratification.


For example, according to the Bureau of Labor Statistics, in


2016 the average American earning $50,766 a year spent as much as 16% of her income, or $8,000 on "little expenses" like credit card interest ($2,750), coffee ($2,180), and wasted food ($2,115). A person focused on building wealth is sensitive to how all of these “little expenses” today add up to missed savings, investing, and strategic debt management opportunities over time.


Consider this fictitious example. If someone buys a $2.95 cup


of coffee every day for 5 years, she would spend a total of more than $5,300 on coffee. However, if that same woman invested that $2.95 every day for 5 years in a financial services solution that earned a 6% rate of return, she would have more than $6,300 (before taxes and other investment expenses). The total difference between buying coffee every day for 5 years, or being out $5300, and investing that money every day for 5 years, or having more than $6300, is more than $11,000!


Someone committed to building wealth realizes that her finan- cial life is a series of priority calls. Each day she has the power to influence her financial future by carefully considering how both big and seemingly insignificant financial choices affect her, and mak- ing thoughtful decisions that positively impact her immediately and over the long term.


Step 3: Deal with Debt Strategic debt management is a critical component to building


Lisa M Ciccomascolo, MS, ACC, CPC info@intuitivecoachingllc.com • 203.888.6100 intuitivecoachingllc.com


Helping you bridge the gap between where you are and where you want to be! Book an appointment for a complimentary 20 minute session


24 Natural Nutmeg - May/June 2018


wealth. Understand that different types of debt exist and pay off high interest debt as quickly as possible. Making choices like auto paying student loans and systematically paying off lower interest debt over time help increase your spending power, positively im- pact your credit score, and enhance your ability to borrow money in the future.


Step 4: Create an Emergency Fund


Life is unpredictable. Even the most lucrative, intellectually stimulating jobs can end. The highest quality appliances break. The best made vehicles break down. Protect yourself by having cash equal to six months of expenses or 20% of your salary avail- able for those inevitable surprises that decrease your income, in- crease your expenses, and/or require prompt unforeseen payments above and beyond your usual spend.


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