The Three Prerequisites for Wealth

The three prerequisites for wealth I am about to share with you are not “secrets” to wealth. They are not a shortcut—or even a path—to wealth. But without them, all the secrets to wealth are of no use. These prerequisite are so simple, you may dismiss them as unimportant. But understand this, if you do not practice these three prerequisites you will either never become wealthy or you will eventually loose what you already have.

Prerequisite #1: Spend less than you make. It sounds simple, but it is very powerful. Actually it is the definition of wealth: a store of money. Everyday you spend less than you make, you are to that degree, wealthy. It does not matter how much you make either, the definition is the same. If you make $45 dollars a day, spend $40 and save the remaining five, that day you are wealthy. Contrast that to the behavior of the famous ‘90s rapper MC Hammer. Just one of his albums, Please Hammer, Don’t Hurt ‘Em, generated over $30 million. But a few years later he had to file for bankruptcy. Why? He spent more than he made. You can make a lot of money, and if you spend more than you make, you will end up not wealthy.

Prerequisite #2: Learn to sell. Knowing how much most people hate even the thought of having to sell something, this probably turned you off. But the kind of selling I am talking about is not used car sales, boiler room telemarketing or door-to-door selling. (Although if you are good at any of those, it certainly does not hurt.) What I am referring to is learning to sell yourself.  If you are to be a successful entrepreneur, you are going to have to sell your goods or services. And if you are to be a successful employee, you are going to have so sell yourself to an employer (whether for a job or a promotion).

The good news is there are many different ways to sell today. Perhaps you are uncomfortable with direct sales. Maybe you prefer in-person networking, or online networking, or social media marketing, or e-mail marketing. Great. It does not matter, but plan on mastering one of them if you desire to be wealthy.

Prerequisite #3: Know the value of things. Not only is this a prerequisite for wealth, it can also be a path to wealth. More than one fortune has been made by someone purchasing undervalued real estate, art, stocks or even a business. If you do not know the value of things, you will constantly be paying too much for what you purchase and receiving too little for what you sell, and that includes yourself to an employer.

Of all the prerequisite to wealth, this one more, than the other two, requires some education. Whether taking a class in accounting, researching the best mutual funds for retirement, or studying the value of businesses to purchase, the more you understand value, the better the deal you will make for yourself and the easier will be the road to wealth. And the less you understand value, the longer and harder that road will be.

There you have it: the three prerequisites for wealth. Two cost nothing and the other is extremely expensive not to have.