Saving a Little for the Future
Year in and year out, one of the most important things they did was set aside some of the year’s bounty for the next year’s seed and long-term savings. While storing seed to plant next year was important, they made their long-term savings a top priority for the years ahead. They knew one of the rules of nature is that everything gets old, so someday they wouldn’t be able to work as hard as when they were young. But even if they were able to keep working, they might want to just take it easy.
She had a favorite saying I’ll never forget because it’s packed with concentrated wisdom: “Little by little we go a long way.”
As for me, I was a city boy that grew up in Los Angeles. So, the cycles of nature weren’t quite as critical to me—but saving for the years ahead is just as important for city folks as it is for farmers.
Tips for Building Wealth — The Importance of Saving
When I became interested in real estate, I was surprised to learn that many income producing properties in the LA area were owned by people who had moved to America from Vietnam. It made me wonder if they had left their country with large amounts of cash to buy all of those expensive properties. I investigated further and was surprised again to learn that most of them had arrived in the US almost penniless. How did they go from penniless immigrants to real estate investors?
They had close-knit extended families that lived together to reduce expenses. The money they saved up to buy those properties came from doing without many of the luxuries Americans think are indispensable. They are living proof that it can be done—even in very high-cost areas like LA.
Consistently building your long-term savings is the best way to create financial well-being and one of our best tips for building wealth. You’ll be surprised how much you can save simply by keeping daily expenditures low. This allows you to increase your net worth even if you’re not in a high-income bracket.
Generating Passive Incomes – Little by Little
Net worth is the key because that means you own assets that generate passive income for the years ahead.
In another example, a friend of mine is a professor at a local college. Teaching positions are stable, but salaries are low. She started saving early in her career and after about three years had enough to buy her first mortgage note. She saved the proceeds and in two years bought her second note. By repeating this process, she now has thirteen notes generating more passive income than she makes from her teaching salary. She is able to buy each new note more quickly that the one before since her income continues to increase. When she retires in a few years, I estimate she’ll have eighteen notes; with more annual income than she currently makes teaching.
That example is why two of our biggest tips for building wealth are saving and creating passive income sources.
Little by little she is going a long way. And so can you.