When it comes to creating wealth, most people immediately think they need to learn about investing. They start researching real estate, cryptocurrency, stocks, and countless other options. This overwhelming array of choices often leads to frustration, especially for those with busy lives who struggle to find time for financial education.
I’ve spent decades coaching people on wealth creation, and I’ve discovered that the path to financial success isn’t as complicated as most make it out to be. In fact, about 80% of what you think you need to know about finance isn’t actually necessary. What you need instead is what I call the “trifecta of wealth” – a simple framework that can transform your financial life.
Start With the Right Perspective
The foundation of wealth begins with perspective – how we see the world. Our perspective determines our actions, and if we operate from a mindset of scarcity, limitation, fear, doubt, and worry, we sabotage our wealth-building efforts from the start.
Scarcity is the greatest destroyer of wealth. It traps people in what I call the “consumer condition” where they look to take more from the world than they give. When you believe there’s only so much to go around, you try to compete for your slice of a finite pie, which leads to the hustle, grind, and hard work mentality.
This approach has a ceiling because there’s only so much production you can achieve on your own. When you labor without vision, you eventually run out of energy. You don’t think about hiring a team, proper delegation, or what you actually want – you just trade time for money.
The truth is that the finite pie is a lie. There’s an infinite pie – more value can be created through exchange. This is the producer perspective, where you create more value in the world than you take from it. It’s about innovation, ingenuity, and value creation.
Find Your Purpose
While an abundance perspective allows you to see opportunities everywhere, without purpose, this can lead to a counterfeit form of abundance – ignorance. You might jump at every opportunity without discernment.
Purpose narrows your focus. It helps you say no to certain things so you can concentrate on what truly matters. This is actually the hardest part of wealth creation for most people – being focused.
Talented people have many options. Interesting people have ideas brought to them constantly. People with money have investment opportunities presented regularly. It takes real abundance to say “not now” or “no” to things that don’t align with your purpose.
To identify your investor DNA, look at your history:
- What have you invested in successfully?
- What have you lost money in?
- Where do you find yourself researching and reading, even during leisure time?
- What topics naturally interest you?
- What skills or knowledge do you possess that others don’t?
Find the flow instead of the force. Discover what you naturally gravitate toward. But be careful – passion can be misleading. As Peter Drucker said, enthusiasm can overrule due diligence. Just because you’re passionate about something doesn’t automatically make it a good investment.
Build a Solid Plan
Once you have the right perspective and purpose, you need a plan. Start with the foundational pieces:
- Transfer risk through insurance – Only insure the catastrophic, not the inconsequential. Raise your deductibles and use the premium savings to increase your liability coverage.
- Establish asset protection – Set up a living revocable trust to avoid probate and keep your assets private.
- Optimize your loans – Use the three R methodology: restructure, refinance, or renegotiate to improve cash flow.
- Practice mindful cash management – Pay yourself first and create separate accounts for wealth capture and wealth creation.
- Minimize taxes – Work with a tax team to ensure you’re not overpaying.
Only after these foundations are in place should you focus on investing according to your investor DNA. Don’t skip straight to investing without building this foundation – you’ll be one financial surprise away from being derailed or destroyed.
I’ve made these mistakes myself. I’ve put money into investments that didn’t pan out, like a golf course. I’ve had hard money lending funds that did well initially but then suffered, costing me significantly. I’ve been stretched too thin with too many properties and investment deals, ruining vacations and sabotaging my sanity, business, and health.
Many people think they’ll take care of these foundational elements “later” – after they start making more money or after their business takes off. But this approach is dangerous. There will never be a “perfect time” to get your financial house in order. The surprises that occur along the way can derail or destroy your progress if you wait too long.
The ultimate goal is financial independence – having enough assets that create cash flow to cover your expenses. This gives you the freedom to wake up every day and choose what you want to do, not what you have to do. You can create a vision so compelling that you’re excited to pursue it, or take a vacation because your financial situation allows it.
Don’t wait to build your financial foundation. Time isn’t found – it’s created. Take care of your financial house now, not later, because waiting will cost you more than you can imagine.
