Get Rich Slowly
In the fable tortoise and the hair, the tortoise didn’t win because he was fast. He won because though he was slow, he was steady with his progress. I firmly believe that the same lesson can be applied to our wealth-building.
1 - Deeper Life Experience
The pursuit of slow wealth allows for a deeper life experience. A way of life that is frankly more enjoyable. I can tell you from personal experience because I’ve been on both sides of the fence. I had phases in my life when I was focused on making money quickly, and I’ve had phases in my life when I decided to pursue a slower pace toward wealth building. From a quality of life perspective, the slower path beats the faster path by miles.
When we are willing to embrace the slower path to wealth, we are essentially pursuing a slower path to life and not being constantly driven to get the next promotion or the next job that pays more. Or if we are business owners constantly looking for new customers or new ways to increase our revenue. Growth is a necessary component of life. However, when we are focused so much on getting to our destination quickly it can have a detrimental mental and emotional impact on our lives.
Slow Wealth = Deep Life
When I was first getting started in my corporate career, I remember being so obsessed about getting that next promotion a month faster than my colleague. Or constantly looking at new openings on Linkedin to see if I should make a lateral move for better pay. I wanted to make more money faster. However, most often, this led to a lot of anxiety without a lot of fruit to show for it. I would get that promotion slightly faster than my colleague. However, in the long run, the gains got wiped out because, for the next promotion, I might be a month behind.
It was a never-ending cycle, and when I look back now, the focus on making more money faster had a detrimental effect on my mental health in the long run. One of my favorite authors Cal Newport often writes about this concept called the deep life. He talks about how deep life is about focusing our energy and intention on things that really matter. This includes our work, our family life, and even our spiritual life. Not wasting too much attention on things that don’t matter. Not surprisingly, people who pursue this somewhat radical life find the deepest satisfaction in their lives. When we can focus intensely on things that really matter instead of things that pop up randomly to take away our attention, we can most often find true satisfaction, peace, and even happiness.
Slow pursuit of wealth and, in turn, slow living can help you enjoy and appreciate your life more. When you have time and space to pay attention to what you’re doing today instead of focusing on the next pay raise or the next promotion, you’re better able to experience the joy and fulfillment of the moment.
2 - Wiser Decisions
My obsession with wanting to make money quickly isn’t just my problem. We live in a world that celebrates speed when it comes to money-making. Just turn on any social media. We are bombarded with ads about how this one guy became a millionaire in just 12 months by learning to day trade. Or how a 27-year-old quit her job to start an Amazon drop shipping business and is now doing seven figures in revenue.
Now, there is nothing wrong with making money quickly. But the problem is when we are constantly being bombarded with these messages, it can warp our perception of what’s possible and practical. It can make us believe that we need to take unnecessary risks in order to achieve financial success. And when we think we need to take unnecessary risks with our finances, it can lead to some very unwise decision-making. We invest in really risky investments. We take on high-interest debt. We ignore our budget.
When I was a child, I experienced two bankruptcies back to back, all before my 10th birthday. My family had made some risky business investments, and it didn’t pan out the way we expected. We didn’t completely understand the industry and the market, but at the urging of some unwise people, the investment was made. Of course, the core of it was that we desired to get rich quickly. And this happened two times within a period of just a few years.
My parents lost their business the first time, and we lost our home the second time. As an 8-year-old, all I remember was constantly moving. And it felt like constantly moving to a smaller and smaller place. Now I love my parents dearly, and I’m grateful for all they’ve done for me regardless of this experience. Though it was painful at the time, it has built me into the man I am today. However, the big lesson I learned for me was the danger of wanting to get rich quickly. I’ve seen firsthand how it can cloud our judgment and rationalize decisions that a sane mind wouldn’t accept.
When you are focused on growing your wealth slowly, you aren’t constantly reacting to situations and rushing on to the next get-rich scheme or investment. You slow down and respond deliberately, thinking carefully about the choice you ultimately need to make. This allows you to make better decisions that are more aligned with your morals and values of long-term thinking.
3 - Compounding Works Its Magic
There are literally hundreds of books written about Warren Buffet - the Oracle of Omaha. They all try to dissect his success. What is the secret formula to his investment strategy? What companies and industries is he investing in? How is he still alive after eating all that junk food!? Warren Buffet is currently worth over 100 billion dollars. That is a lot of money.
However, an interesting fact that a lot of people overlook is that 99% of the 100 billion actually was accumulated after his 50th birthday. Warren Buffet didn’t earn his first $1 billion until he was 56 years old. People clamor all over Buffett's investing strategy. However, what most people overlook is that his success didn’t come primarily from his investment strategy alone but from the fact that he’s been investing for three-quarters of a century. Allowing compounding to work year after year, decade after decade.
The curious child that he was, at 11 years old, Warren Buffet was already buying stocks. By the time he was 21 years old, he already had a net worth of $20,000. The simple fact is this. Warren Buffet’s $100 billion net worth isn’t due to just being a good investor, but being a good, patient investor since he was a child.
I’m not saying he doesn’t have great investing skills - because I wish I had half the financial acumen that he has. However, we all miss the point when we attribute all his success to his investing skills. Warren Buffet is worth $100 Billion today because he’s been a patient investor for 70-plus years. He is a skilled investor, but his secret sauce is he allowed compounding to do its magic over seven decades.
In the same way, when we are focused on getting wealth slowly, we have the patience to wait decades for our wealth to grow. And just like it did for Warren Buffett, the magic of compounding will work for us well. The $10,000 invested today in the market may not seem like much. But when you let it compound in the market for 30 years, at an 8% return, it will multiply ten times to $100,000. You need to take it slow and let compounding do its magic.
4 - Sustainable Wealth
In the simplest terms, sustainable wealth is wealth that can weather any storm.
We will need to weather a lot of storms in our lives. Just look at all the unexpected things that happened in the past few years. Who could have imagined COVID-19 to hit us as it did? And I’m not just talking about the pandemic but all the economic disruptions that came with it. The stock market crashed. Businesses were forced to close their doors. Millions of people lost their jobs. Or how about Russia invading Ukraine? Not only did it have tragic human consequences, but it drove fuel costs to unprecedented levels and created catastrophic food shortages around the world.
The point is that life will always throw us curve balls. And when these curve balls come our way, they could upend everything we’ve worked so hard. That is why it is so essential to build wealth that will be sustainable regardless of what may hit us. When we are focused on growing our wealth slowly we have the time to do that. To build a really strong financial foundation.
We can invest our money into well-diversified index funds across different tax-advantaged accounts so our money is well protected regardless of how the tax code can change. We can pile up emergency funds in our checking accounts, so we have enough financial runway to ride out any economic storm. We can also diversify our holdings across different asset classes, such as bonds, real estate, and businesses, so our wealth isn’t tied to just one asset category. When we build our wealth slowly, one building block at a time, it's similar to the pyramids. The wider the base, the taller it can grow. And the taller it grows, the more sustainable it becomes. And like the pyramids, it can last for thousands of years through all the storms.
5 - Keeps Us Humble & Patient
If you spend many years growing your wealth, you will look at lavish lifestyles very differently. You won’t easily be impressed by those who live in multi-million dollar homes and drive luxury cars because you understand what it takes to really build sustainable wealth: time and patience.
If someone is quickly buying big homes, and fancy cars and going on lavish vacations, they most likely are relying on a high income or, worse yet, relying on easy debt. After decades of experience building wealth slowly, you will see that such an expression of wealth isn’t sustainable. Most often, it is our egos that make us overspend on things we don’t need. It is our egos that drive us to take unnecessary risks with our money. And it is our egos that prevent us from being humble and learning from our financial mistakes.
But when we grow our wealth slowly over a long period of time, we will have the time to learn from our mistakes. Because trust me, we will make a lot of them throughout our lives. I would rank number one in the mistake-making race. But the good thing is these lessons from our mistakes keep our egos in check. It sure has kept mine. Ego is bad for our financial success, but humility is excellent for our financial success. Let’s cultivate our humble mindset through slow wealth-building.
Patience is a virtue that is in short supply these days. We live in a world where we want things, and we want them now. But when it comes to building wealth, patience is critical. It takes time to save up enough money to invest. It takes time to grow our investments. And it takes time to build wealth that will last a lifetime. But if we are patient and we focus on the process, we will be rewarded in the end. We will have more options in our lives and live life at our term. So if you are patient and you focus on the process of building wealth slowly, you will be rewarded in the end.
