Whenever anyone discovers how money works, they always say to themselves: “I should have started sooner.” “If only I’d started in my twenties, but now I would be home and dry.”
However, whether you can build wealth doesn’t depend on your age. Instead, it’s all about attitude. Sure, you might not wind up with as much money as if you had started earlier, but that’s not what it’s about. Instead, it’s all about changing your life now so that you can meet the financial requirements of the future.
The Allure of Compound Interest
For many people, wealth comes from the slow accumulation of compound interest. At first, it’s just a trickle, but then as the years go by, it becomes a torrent. Eventually, you have a vast amount of money that you never imagined possible.
The way compound interest works is interesting. Each year, the amount of interest grows because the earnings of the previous year are added to the pile. To make a sizable income, you often have to wait a long time, but it’s worth it. At the end of the process, you have money that is literally creating money all by itself.
The problem with compound interest is that it often feels like a missed opportunity, particularly if you are older. There are even thirty-year-olds who think that they’ve missed the boat because they didn’t start ten years earlier. However, there are ways around this.
Getting Rid Of The Lost Opportunity Mindset
Missing out on a compound can feel like you’re screwed forever. But you need to pay careful attention to the story that you are telling yourself. People can get into the habit of believing that their “life is over” and that they can’t do anything about their financial situation. “It is what it is,” they tell themselves.
However, that’s not the way the world works, and it’s certainly not how fortunes are made. Most people do not spend years carefully investing and accumulating wealth to get rid of. Instead, they find an opportunity to make money in the world and then exploit it. People go from having nothing to having everything in a matter of years usually, not decades.
The idea here, therefore, is different. Instead of carrying on with your normal job and accumulating money slowly, you’re looking to earn it quickly. You’re changing your mindset away from the compound interest approach and looking more at the income side of the equation.
Of course, if you’re already super old, it might be too late to make any significant changes. However, if you have at least ten years ahead of you, there’s almost always something that you can do to make a difference in your financial situation.
Eliminate Your Tendency to Compare
There’s another reason why people get caught up in missed opportunities in financial markets – the tendency to compare. Friends may tell you that they have a fortune in their retirement accounts, making you feel like you are missing out on the party. They have a million dollars while you have only a few thousand.
When you hear things like this, it is easy to feel disheartened. You ask yourself “what’s the point of even making an effort if I am so far behind?” Worse still, you might even beat yourself up for not having made as much progress as the people around you.
The trick here is to make the only person you compete against yourself. You’re the one who ultimately matters in this equation, and whether your life is moving forwards. Don’t compare yourself to others. Instead, compare yourself to where you were last year, or five years ago.
Anyone who compares themselves to other people is always going to feel disheartened. Even ultra-successful people can always find others who are more successful than they are.
Why It’s Not Too Late
There are two ways of becoming extremely wealthy. The first is to patiently invest. The second is to know something that other people don’t. And the latter is almost always a lot more fun.
Most people who make a lot of money find an unexploited niche in the market. They have an idea, see that nobody else is filling it, and then run with it.
Importantly, this idea doesn’t have to be enormous. It can be something small, but still have a massive impact.
For instance, you might connect buyers and sellers and charge a fee for the privilege. Or you might launch a new course online. You can even get day trading advanced qualifications that provide you with insights that other market participants don’t have.
The trick here is to find something you can leverage. You want to change how you make money from the limited income of a finite job to something more expansive. Money should be coming in for you, whether you are trading your time for income or not. You should be richer in the morning after you sleep than before you go to bed.
There are all sorts of people throughout history who made massive changes later in their life and became ultra-successful. For instance, Britain’s richest man, Sir Jim Ratcliffe, only started when he was 39. Within twenty years, he’d built an enormous $20 billion fortune.
The key here is the mindset. The world is constantly full of opportunities. There is almost unlimited capacity to make money, as long as you take the right approach. Anyone can make a significant change in their lives that increases their income and capacity to build wealth.
What’s more, you don’t need to be an entrepreneur or virtuoso. You just have to find something that you can do. You need to craft your own path.
Ultimately, playing the money game is fun. Making it typically involves having a more interesting life, interacting with exciting people, and gaining material wealth that is hard to imagine before you have it.
You’re also having an impact on the world, and that’s valuable at any stage in life. You don’t need to be in your twenties to gain satisfaction from that aspect.