Building Wealth is a Game, and Here's How You Win

Megan Holstein

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When you study the lifestyles of wealthy people, what you learn will make you lose faith in the human race.

Most people who are not wealthy imagine wealth works something like this — the more money you make, the wealthier you are. People who make $150,000 a year are wealthier than $50,000 a year, people who make $500,000 a year are wealthier than people who make $150,000 a year, so on and so forth.

The stark reality is that this just isn’t true. There are plenty of people who make $80,000 who have upwards of $3 million in the bank… and there are even more people who make $500,000 a year who are flat broke, people who can’t make ends meet at the end of the month and who have nothing for retirement.

So if having a high income doesn’t make you wealthy, what does?

Forget everything you think you know about wealth

Don’t think of wealth as something inherited, something class-based, something societal, political, or anything else. Think of building wealth like a game.

The wealth game is played in teams. Your team is whoever is in your taxable household. For most people, that’s probably going to include themselves, their spouse, and their kids. Your team will win the game by having great offense and great defense.

Great offense is your income. It’s how good you are at bringing dollars into your household. Teams making $500,000 a year are playing great offense, but you don’t need to make $500,000 a year. If your income reaches the bottom of the middle-class income for your area, you are playing good enough offense to start building wealth. There are people with $1M or $2M in the bank who make less than $40,000 a year scattered all over the place, hiding in plain sight.

Great defense is your household expenses. It’s how good you are at keeping dollars from leaving your household. Teams who play great defense save 15–20% of their household income before even their first expenses. Teams who play great defense also seek to minimize their expenses before any other considerations. They don’t buy houses with mortgages more than twice their annual income, they buy used cars that are at least three years old (cars depreciate most of their value in the first three years of ownership) and own them for ten years or more, and they take simple vacations with inexpensive AirBnBs and economy flights. People who play great defense live lives just as enjoyable as people buying first-class flights and lavish hotels, but they do it on a fraction of the budget.

In America, we instinctively understand the importance of playing great offense. Our culture teaches us to play great offense. People are regularly trained to take more jobs and better work, and we privilege people with a high income over those with a low income.

However, we are terrible at defense. American culture teaches people not to play defense. Advertisements bombard us every second of the day to convince us to spend our money on these clothes, that watch, this car, that house, this vacation. We think the more luxury goods you surround yourself with, the wealthier you are.

For the majority of Americans — specifically, the 62.9% of Americans making more than $50,000 a year — by far the greatest obstacle to you building wealth is simply that you don’t know how to play defense at all.

This is great news. If your offense isn’t good, it’s difficult to improve your offense. Getting a higher income requires working for promotions, getting certifications, getting educated, spending more time working, and a host of other sacrifices. There are lots of societal ills and oppressions preventing people from playing better offense. All you have to do to improve your defense, though, is stop spending your freaking money.

How to stop spending your money and play great financial defense

What keeps people from spending their money is wanting to “maintain their current lifestyle.” They want to keep paying for salon haircuts, restaurant meals, newer and nicer cars, updated homes, and fashionable clothes. Problem is, these things cost money, and spending money is the opposite of not spending money.

To cut your epxneses, you’re going to have to learn to live with less.

  • Finish your lease on your beautiful apartment with granite countertops and move into a more reasonably priced building with linoleum countertops fifteen minutes across town.
    Example: Susan finishes her $899 lease on a one-bedroom luxury apartment downtown and moves into a $599 one-bedroom middle-class apartment fifteen minutes down the street.
  • Stop shopping for clothes at the mall and start shopping for clothes at consignment shops and Goodwill retail stores.
    Example: Laura switches from buying clothes at the mall (annual cost: $8,000) to buying clothes from consignment shops (annual cost: $1,500)
  • Sell your late-year-model and/or luxury vehicle and buy something a few years older and a few models less luxurious, like a 2015 Honda Civic.
    Example: Matt sells his 2019 Subaru Impreza WRX (monthly payment: $450) and buys a 2013 Subaru Impreza (monthly payment: $225)
  • Stop eating out multiple times a week at sit-down restaurants. Either try finding takeout places that offer eminently affordable food (Mexican restaurants, Vietnamese restaurants, and Gyro places are great for finding affordable takeout) or start eating at home more often.
    Example: Jordan quits going to Outback Steakhouse (monthly food bill: $650) and starts eating at a local Mexican restaurant instead. He also starts preparing his lunches for work at home. (monthly food bill: $300)

Any one of the above changes can save you hundreds of dollars a month on your expenses, all of which can be funneled into paying off credit card debt, building savings, or furnishing your 401k.

If you’re not open to the idea of cutting your expenses, doing so can feel like a deprivation. But I promise you, they’re not. The weight that’s lifted off your shoulders from knowing you have enough money to weather tough times is worth so much more than the fleeting pleasure of brand-new Doc Martens and a dry martini from the bar.

I used to be the kind of person who demanded a salon-quality haircut every 5 weeks and bought $300 shoes every year. Now I’m the kind of person who cuts my own hair and buys my shoes at Goodwill. I’m not the height of fashion anymore, but people still tell me I look good — and more importantly, the constant stress of not having enough money has been lifted off my shoulders. I wake up every morning, look at the positive numbers in my bank account, and sigh with relief. Ahhhhh. What a good way to start the day.

If you think something is a “deal,” it is probably not a deal

Playing great defense is not about finding the best deal or the cheapest offer. In fact, saying “I got a great deal” or “I love bargain hunting” is often a way people who play poor defense justify their poor defense to themselves.

Example: Rob loves owning the latest Mercedes. Every year, when he finds a new Mercedes, he will spend sixty hours price comparing, calling dealerships, and starting bidding wars so he can get the best deal on his new Mercedes. At the end of this long process, he often does get the best deal.

Brian, on the other hand, just buys a regular people’s car and owns it for five or ten years. Last year, he visited his local dealership one afternoon and bought a three-year-old Toyota Corolla. He will drive the same Corolla for the next seven years.

Brian did not get the best deal, not by a long shot. Rob is clearly a better deal-hunter than Brian is. But it’s Brian who spent tens of thousands of dollars less on his car, and it’s Brian who’s going to invest $50,000 over the course of seven years into his 401k to build massive wealth.

Hell, I’ve fallen into the “deal” trap. A few years ago, me and a friend of mine would go to various malls together at least once a week. I generally made a point of only buying a few items, and buying them on the clearance rack, but I still quickly racked up $6,000 of clothing expenses every year. When I switched to consignment shops and deal-shopped there, my clothing bill went down to $1,500 a year, but I was still spending lots of time visiting stores and clothes shopping for fun. It was only when I finally decided to quit shopping for fun that my clothing bill went away.

Spend time learning and planning

The sports analogy for building wealth even goes a little further. In addition to playing great offense and great defense, you need to spend time improving your ability to play the game — in other words, you need to read books, watch YouTube videos, and otherwise hone your financial skills.

That’s how I learned everything you’re reading in this article. I went out and read books like Your Money or Your Life, You’re Making Other People Rich, The Millionaire Next Door, and Secrets of the Millionaire Mind. Instead of just randomly trying things and hoping I’d get better at the game, I went and found people who were professionals at the game and learned a thing or two from them.

You also need to spend some time planning your finances, the same way a football team needs to spend time planning plays. The number one tool you have, for playing either great offense or great defense, is awareness of your financial situation. Psychology studies have found that sheer awareness of statistics like your weight, expenses, and net worth make you more inclined to improve them. So use an expense-tracking tool like Mint to to track all your expenses and income, and make a point of looking at the charts they produce at least once a week. I check mine every three days, the amount of time it takes a transaction to post to my bank.

There is a lot more to learn about building wealth than just what’s in this article. Knowing that you need to play great offense and great defense is just the start of what you need to learn to build wealth. But it is where you need to start.

This is a principle I’ve touched on in my articles about money before — people think they need to learn about things like their return on their portfolio, stock market volatility, and inflation before they have even mastered basic money skills like how to control your expenses and how to pay yourself first. Focus on these fundamentals and you’ll be protected, regardless of the rate of inflation over the next few years.

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Self-help writer with 3M+ views on Medium and Quora. Covering personal growth, relationship skills, and career growth.

Columbus, OH
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