The phases of creating wealth

Money has 4 functions: to survive, to invest, to give and to enjoy. Managing wealth means managing these four functions so we can maximize our happiness. When we overcompensate in one function and neglect the other three, we often feel a tension. To really get the most of wealth, your money should be performing all 4 functions. The 4 phases of building your wealth are survival, accumulation, investing, financial sophistication/ freedom.


This is the phase where you work to meet your 3 basic needs. There are 3 basic needs: food, clothing and shelter. We all work to meet these 3 basic needs. However, we have learned to make things very complicated by confusing “needs” with wants. We buy a bunch of “wants” and are shocked when all that stuff just stresses us out. Even worse, we overspend on our needs for example paying for more food than we need to stay healthy. Not only does this deprive us of money that can be put to better use elsewhere but there are also health consequences to overeating. The simpler you keep your survival needs the more you can enjoy life. Do not spend more than you earn on these needs.

Accumulation phase

Once you are no longer struggling to survive, your next goal should be to invest in yourself and begin to save money. Learning to save is a great characteristic to have. During accumulation, you are saving extra earnings while educating yourself on investment vehicles. Education is essential to successful investing – never hand your money to someone else and expect them to do all the thinking for you. You have to become the CEO of your money, directing where it goes.

While saving money to accumulate wealth, be sure be sure to have some fun and give too or you will feel a tension in your finances. If you save every penny you make and never have fun, you become a grumpy old troll. Also, if you never give, you stop the flow of your blessings.


Once you have accumulated enough wealth, you should invest in well researched opportunities. It could be real estate, a business or paper wealth.

Sophistication/ financial freedom

As you get comfortable with investment, you will learn about more sophisticated opportunities. Always do your due diligence before investing. Most sophisticated investors achieve financial freedom at this phase.


At the heart of any wealth building strategy is character.

What is character?

Character is an outward reflection of an inner connection. There are 3 main elements of character:

  1. Honesty: is being true in what you say. Say what you mean without the intention of misleading others.
  2. Integrity: Doing what you say to both yourself and others. This includes being consistent with your actions.
  3. Responsibility: Taking responsibility for areas of your life and job duties you are in charge of. Example, your child breaks your neighbor’s windows, it is your responsibility to make it right even though it was not directly your fault.

Of all the 3 characteristics, I will say integrity is the area most of us suffer. Integrity involves not just doing what you say to others but doing what you say to yourself. Integrity demands frequency. Frequency is often the missing link in our character. A lot of times we don’t pursue things long enough. The key to change is doing the same “profitable” thing over and over again. You cannot be successful without subscribing to the principles that make you successful.

To become a person of integrity you need to have a sold understanding of what is important in your life. You have to consistently ask, is this worth my while?
For me, I have to make a cut back in certain areas of my life so I can keep commitments that I have already made. We often get distracted by over commitment.

The bottom line of any good wealth building strategy, is forming good habits and repeating the right things the right way. Good results come from good routines. The wealth cycle is a rinse and repeat system – earn, save, invest. Do that over and over again and you will wake up one day to find yourself wealthy. There are no magic bullets, building wealth too quickly, leaves you void due to lack of character. In your quest for wealth, do not ignore good character development. Character development is a journey we all have to take as no one is born with good character. Character is developed over time by making the right choices one day at a time. If you mess up just pick yourself up and try again.