The following guest post was written by Matt at DividendMonk.com. His website is focused on simple living while building wealth using dividend-paying investments.
People seem to be at odds with the concept of money. On one hand, just about everyone wants more of it, but on the other hand, many people seem to have the notion that money implies greed or immorality, and that wealthy people are necessarily this way. My personal view is that just about everyone should have the goal to build wealth, even if you plan to simply give it all way. Here’s why:
1: Having financial security allows you to focus on things you love.
Working at a job that you hate because you need the money is not what life should entail. If you are financially secure, you can work on things that you love and that you feel will provide real value to people. The more abundant your finances are (up to a certain extent), the more free time you can have to focus on what you’re passionate about.
Unless you truly love your work and think the mission of the company you work for should define your entire life, then seek to enrich yourself through means outside of your job, and try to build other forms of income. Try to be well-rounded in your skill-set instead of focused on doing only a handful of things well for your employer.
2: The more you have, the more you can give.
If you’re a generous person, you likely spend time and money on providing assistance in one way or another to those who need help. If you’re a generous person with money, you have extra resources at your command to help you with this goal. All things being equal, if you’re a rather decent person, I’d much rather you have money than not. Sure, there are plenty of other resources that can be given away, but money is among the most tangible, and if you are abundant in those other resources in addition to having money, then that’s a winning combination.
I’ve watched my 74-year-old father’s habits over the years. He’s a very generous person- giving to his church, vastly over-tipping at restaurants, making friendly conversation with those who seem to need someone to talk to, and loaning money to neighbors that are in a financial bind at the moment and forgetting about repayment until they come to pay him back. However, in his long life, he has never grasped the power of compounding or even wealth-building in general. He makes a healthy income, pays his bills, avoids debt, and has an 800+ credit score, but has never set out to build wealth and therefore was unable to pay to send his children to college and was unable to retire when he wanted to. Based on his generosity and his level of responsibility, I can only imagine the amount of value he could have created if he had saved a few hundred bucks each month, understood and controlled his expenses, and learned to compound his money at a reasonable rate of return. The combination of someone that knows how to build wealth, but doesn’t love money, is astoundingly positive.
3: The process is the important part.
Becoming a self-made financially secure person (and remaining that way) takes a lot of work, a lot of abilities, and a lot of development. By setting out on a journey to build wealth, you’ll obtain confidence, learn many new things, increase your diligence and other virtues, improve your responsibility, and in general likely become a well-rounded, skilled individual. The personal growth alone should be enough to warrant the journey. If you set out to make $1 million for the sole purpose of giving it all away, then that’s perfectly ok, because the abilities and growth you’ll have gained along the way are far more valuable than the money itself. It doesn’t matter which way you do it, you’ll still gain abilities.
If you work for a company, but diligently save and invest a high percentage of what you make and use your money wisely and build a small fortune in the process, then you’ve learned qualities of perseverance, diligence, and discipline.
If you start your own business and turn it into something valuable that provides good services or products, then you’ve improved your leadership skills, initiative, confidence, prudence, and judgment, and have gained a well-rounded education in life.
If you write a book, make visual art, start a blog, create an invention, or build wealth by any other creative means, then you’ve explored yourself and the world more thoroughly than you otherwise would have. You’ve expressed your creativity and intelligence at a level that few others have.
No matter which path you take on a journey to build wealth, as long as you do it fairly and ethically, then you’ll have gained a tremendous amount of resources in the process.
Final thoughts.
Of course, money isn’t everything. Money can’t buy happiness and it certainly won’t turn a bad person into a noble one. Building wealth is not done by hoarding, fearing, and trying to retain value. It’s about providing value and understanding growth. Wealth is not simply a great deal of assets- it’s a great deal of assets in the hands of a person who could make them all back again even if they were all taken away from him or her, because the wealth they’ve really built up along the way has more to do with the inner qualities.
I’d love to hear your thoughts in the comment section below…
{ 13 comments… read them below or add one }
This is something that I struggled with for some time, thinking that it was wrong to want to build wealth. However, I don’t really care about the money, but what I can do with it. I would love to be able to help family and friends more, financially; to “vastly overtip” (that sounds like a good goal); and to be able to give more at church. I finally realized point number 2, the more I have, the more I can give and do with it.
I have learned a lot as I’ve started taking control of my finances: about finance, about myself, and about God.
Great post! I agree the important part is the process…as with any goal you set to achieve the process of you changing, of you growing, of you applying disciplines, of you learning from mistakes is what provides the greatest gain for you as well as those around you who may benefit directly or indirectly from the reaching of your goal.
I’ve struggled with the reasons for my quest for wealth…not necessarily why I am striving to build wealth, but getting others to understand why I strive to do so. I believe your post will help me with this as I am approached with…WHY? Thanks for sharing!
That’s awesome. I never understood why so many people think having money is wrong, or how people think all rich people are evil. Money is not inherently good or evil, people are. Money in the hands of bad people can do bad things, money in the hands of good people can do good things. Like you said, I want all the good people to get as much money as they can. We can do more good that way.
So many times I think that people get caught up in their jobs and life and never think towards the future. They put their a percentage of their salary in a 401 K and do their time until they retire.
I do not feel wealth is a bad thing, I think it is how you focus on it that can be. If you are so driven that money becomes your main goal in life, even if you are not wealthy, that is an issue. However, take someone who is worth millions, maybe they are not focused on money, but perhaps they only give a few thousand a month to charities. While most of us consider that a lot, to them it is nothing – it’s like you and I throwing a $5 in the collection plate. I think that is an issue too.
At the end of the day if you are generous and have a well balanced life, you are probably doing okay.
Matt,
Great post! As President of Values First Advisors, we have hundreds of clients and many of them look at wealth being a bad thing. However, money us merely a tool. It can be used as you mentioned to bless others and take care of your family. I always say money makes you more of what you already are. If you are generous, more money will make you more generous. However if you are selfish and greedy more money will only make you more selfish and more greedy. Love your dividend approach too! At faithbasedinvestor.com, we often look for companies increasing their dividends. Let me know if you’d like to guest post sometime!
Many Blessings,
Jay
Three words, “Money is Freedom”. Unfortunate but true in today’s wrld.
Since only about 2.6% of Christians tithe, most Christians seemed to have forgotten about the giving part or just ignore it. They are trying to obtain wealth for worldly reasons, not to become better givers.
Hi all,
I’m glad so many people are in agreement. Being comfortable with the concept of wealth is important when it comes to building it, yet is often the most overlooked part.
I agree with most of the comments.
I am a true believer that you can create wealth by giving it away. But until we understand that concept of how to create wealth, we will not be able to give it away.
After going through a divorce that left me financially devastated, I wrote an ebook called Taming the financial beast.
Great article! Here are a few of my priorities: 1) Do not take advantage of people; 2) Do not step on someone else in order to make money; 3) Have a pure motive behind making money; 4) Do not let generosity depend on the amount of money I make; 5) Do not let the accumulation of money change what is most important; 6) Make as much money as I can while not violating the first 5 priorities.
My concern is that people will put “make money” as the main goal and try to fit everything else around it….that may make you money but it will compromise your integrity and character.
Great priorities Mitch.
Looks good to me.
Nice article. I’d like to build wealth so that I won’t have to worry about not having any. I’d also like to use it to take care of family and loved ones, help others in need, and support other noble causes.
I also agree that real wealth is knowing how to build wealth even after it’s been given or taken away. This is more of an internal mindset in my opinion.
It reminds me of this quote by General Douglas MacArthur: “Security lies in our ability to produce.”
awesome post! I completely agree with your reasons for building wealth. The fact of the matter is that money is amoral and is ethically indifferent. There are poor people out there who are good, just as there are poor people who are bad. There are also rich people who are good just as there are rich people who are bad. It’s what you do wit your wealth (money) that will ultimately make the difference.