Why Your Job is Not Enough to Build Your Financial Wealth

Posted on 03. Jan, 2012 by in General

Unless you are one of the top Canadian CEO’s who take just over three hours to make an average worker’s yearly salary OR you are in the tiny percentage of people who make enough income from their jobs to become financially wealthy, chances are you’re probably part of the majority of nine-to-five or eight-to-four masses who work for a paycheck.

Once upon a time, you were told that if you worked long and hard, and invested a small percentage of your earned income into a pension plan or mutual fund, you were almost guaranteed to retire and live a comfortable life. My, how times have changed.

But – if you think either consciously or subconsciously that the path to financial wealth can be achieved through your job, you are most definitely mistaken.

Your job is your job – financial wealth building is something else.

In a previous blog post I talked about the difference between riches and wealth. Just to recap, financial wealth is about having enough passive (unearned) income to live your life without the need to physically go out to a job each and every day.

A lot of people don’t know the difference and this is marked by the fact that most people think, often incorrectly that their job is the path to financial wealth.

It’s okay to work at a job you have passion for; it’s just not enough anymore. Sure, you are certainly ahead of the majority of people who don’t save or invest but modest investing will never amount to true financial wealth.

In reality, there are only a small number of people that could easily live off a fraction of their huge salary and invest the rest to achieve financial wealth.  The rest of us tend to spend money in direct proportion to the amount we earn. It’s a fact that

  • Prosperity can and does provide a false sense of security
  • A high income does not always equate to financial wealth as reinforced by high profile bankruptcy filings.
  • People often overspend and underinvest before waking up one day on the downside of their primary income years and having to put a cap on their spending.
  • The wakeup call often comes later in life when people are shocked to realise how little income their current investments will provide when they stop working

Easy Come, Easy Go

Instead of thinking that your job is your financial wealth and security, think of it as the place where you can earn the capital for your investments by investing a percentage of your salary toward your future, whether that is saving for a deposit for a piece of real estate (a great way to secure your future :-D ) or another form.

Living off less than you make and consuming far less than the media wants you to requires tremendous discipline and focus. It’s certainly not easy, there’s always a bill or expense to pay but let your own personal compass guide you toward your values, dreams and plans for the future.

Maybe if you start thinking like an investor, you’ll end up investing like one too!

Your Turn

I’m turning it over to you now – I’d love to hear your thoughts and comments.

Have a great week,

Jane

 

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