When dedicated to building wealth, we may be on high alert for the major milestones, like saving enough to put a down payment on your first house, landing a major raise or sending in that last student loan debt repayment. These are all big deals, but what about the “little” deals, if you will? The more subtle indications that you’re building wealth?
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Austin Williams, a personal finance influencer who specializes in frugal living, recently posted a video blog on his YouTube channel, discussing the seven signs that you’re quietly getting rich. Let’s have a look at these indicators you may not know to keep track of.
Williams said that the first sign you’re quietly getting rich can be found in your investment portfolio, when it begins trading by hundreds of dollars, building up from very small amounts in tandem with the market. You should notice this happening after you’ve held growing investments in the stock market for a while.
“As you consistently build your portfolio, month after month, year after year, the returns start to become more significant,” Williams said. “The more you have invested, the larger the moves, for better or for worse. When you’ve built up a portfolio that’s trading by the hundreds, whether it is up or down, it is a sign that your money is starting to work very hard for you.”
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The second quiet sign of wealth accumulation can also be the slowest. It’s when you are no longer measuring your financial foundation by hundreds, but by the thousands. A good example would be taking your emergency fund from $800 to $1,000 and then to $2,000. You may also see this quiet sign in your investment portfolio, too. Rather than seeing it go up by the hundreds (the first sign), you’re now seeing it go up by the thousands.
“This shift in measurement is a big sign in progress because it shows that you’re beyond tracking pennies and dollars, now tracking in much larger increments, which means your wealth is growing at a much quicker pace,” Williams said.
A lot of us who buy fast fashion or low-priced but notoriously unreliable used cars take a lot of heat to buy nicer things that will last us longer. It is, after all, the more economically sound choice. But many of us are living paycheck to paycheck and simply can’t afford to spend more, even when it’s clearly in our best interest. The third sign you’re quietly getting rich, according to Williams, is the ability to be able to invest in quality, long-lasting items that are generally more expensive than cheap alternatives. Interestingly, this isn’t just a sign that your wealth is augmenting, it’s also a sign that your mind is opening.
“As your financial mindset shifts,” Williams said, “you start choosing quality over affordability. And it’s not because you’re trying to show off. It’s because it makes much more financial sense. You are no longer stuck in survival mode.”
The thought of a $10,000 windfall is, for many of us, jaw-dropping. Think of all the ways it could change our lives for the better? Once you start accumulating significant wealth, the thought of a $10,000 windfall is still a nice chunk of change, but it’s no longer the stuff of wild, absolutely life-altering fantasies.
“As you start to build your wealth, although $10,000 is still a lot of money, it no longer is life-changing money,” Williams said. “When you have an emergency fund, are caught up on your bills and have a solid investment portfolio, an extra $10,000 is just more fuel to the fire.”
“When you’re broke, even the smallest decisions feel heavy and you overthink everything,” Williams said. “You hesitate — and it’s not because you’re indecisive, it’s because you’re afraid to make the wrong decision.”
You will still have to make decisions that send you in conflicting directions once you’re building substantial wealth, but they will be different, bigger. You won’t go into a spiral over whether a necessary car repair should be delayed to protect your budget. Less financial pressure means less financial anxiety, which means clearer, more assertive decision making. You don’t have to deprive yourself.
When you’re struggling to stay afloat amid credit card debt or you don’t have enough money in your emergency fund to cover a medical bill, you may be pushed to budget in a way that emphasizes living below your means — and that may feel like a sort of new concept as you start to track every dollar that comes in and goes out. If you’re building wealth, you’ll still budget and be vigilant, but you’ll no longer have to micromanage each and every single transaction to ensure you’re not overspending. In a sense, you can chill a bit, because you’ve proven to yourself that you’ve got this.
“Once you start to build financial security in life, you notice that you no longer need to do these things as religiously,” Williams said. “And it’s not because you’re beyond these things, it’s because you’ve developed good habits, or you’re more conscious with your spending.”
Building wealth is the result of small, steady and intentional actions. It’s a result of spending below your means, managing a diversified investment portfolio, avoiding high-interest debt and keeping a well-stocked emergency fund. You’ll feel this entire yet unobvious experience of getting rich. But for people on the outside, the wealth you built gradually may present glaringly.
“From the outside, those small, ordinary actions you took seem extraordinary, and people want to know your secret,” Williams said.
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This article originally appeared on GOBankingRates.com: 7 Signs You’re Quietly Getting Rich, According to Frugal Living Expert Austin Williams
