How to Get Rich in 10-15 Years

What Does it Mean to be Wealthy?

Being wealthy has nothing to do with a set dollar amount or what car you drive or which labels you sport.

If the income and/or returns of your investments are more than twice the amount of your annual living costs, then you, my friend, are wealthy.

If you own a business and make millions of dollars, but the business will fail if you are not in it, then all you have is a very highly paid job.

Real wealth is about securing a stream of income for yourself that consistently throws off returns that are at least double your annual living expenses.

A Big Salary Doesn't Automatically Make You Rich

Getting rich takes a lot more than just securing a big income. Many who aspire to be multimillionaires stumble at this point.

They work hard, get promoted or build their businesses and start earning large amounts of money. but these "would-be" millionaires fail to fulfill their true wealth-building potential at this point.

You see, they get seduced by the illusions of wealth as portrayed by the aforementioned luxury-goods marketing machine that they see in magazines and on television.

Don't get me wrong; if you have a large income, you have a huge leg up over the person earning an average income. But if the odds hold true, then you are could blow that big advantage by overspending.

Are You an Aspirational Spender?

Aspirational spenders are above-average-income earners who yearn to possess the lifestyle of the truly wealthy but do not earn enough money to do so.

Instead, they employ credit card and home equity loan debt to acquire the trappings of wealth -- fancy cars, vacation homes, designer purses, designer suits etc.. They actively pretend (self-delude is a better word) that they are rich. This becomes an all-consuming pantomime of self-delusion, as more and more money is required to fuel this facade of wealth.

The aspirational spender typically earns between $100,000 and $150,000 per year. This is 2 1/2 to 4 times greater than the national average income.

In fact, it is more than enough of an income to get wealthy on within a 10-15 year period.

But these people never do develop real wealth.

Their incomes continue to grow, and they make terrific employees and are usually very good at their jobs, but their desires are always one step ahead of their income.

The Key to Developing Real Wealth

Many years ago, I read a book titled "The Richest Man in Babylon" by George S. Clason. In that book, I learned that I would never be able to satiate every single material desire that I have.

So, instead of trying to fulfill as many of my "wants" as possible, I started getting very picky about which "wants" I chose to indulge ... which "wants" I chose to postpone and which "wants" I chose to abandon.

Once I fully accepted that I'll never have every single thing that I may wish to possess, it was like a great weight was lifted off my shoulders; it was very freeing. It also allowed me to better appreciate what I already possessed.

But the most important thing it did was get me off the spending carousel and onto the road to living beneath my means ... and start saving and investing, which is the real route to obtaining large-scale sustainable wealth.

Your Desired Future is Just a Decade Away

Wealth can be created from any starting level; it is not income-dependent. However, in this article I want to highlight how much easier it is to get rich if you already have a large income.

It really doesn't matter which vehicle you use to create your wealth -- whether it be real estate, stocks, commodities, options or your own business. Any success that you find in any investment endeavor will be meaningless if you continue to spend more than you earn.

It is only when you start living beneath your means that you will truly be on the road to real wealth-creation.

If you earn over $150,000 a year, you have absolutely no excuse for not being rich!

What's the secret? All you have to do is live on 30% of your gross income and invest the rest.

Your 15-Year Plan to a Lifetime of Riches

At $150,000, assuming a 35% tax rate, your take-home pay would be a shade under $100,000.

If you want to get rich, start by simply living on $50,000 and investing the other $50,000. Do that for 10-15 years and you will be rich, period.

If you can average just a 12% compounded annual growth rate over 10 years, you'll have a shade under a million dollars.

Over 15 years, you'll have over $2 million -- two million dollars that is growing at 12% per year is more than enough money to last a lifetime.

That's it; pretty simple right?

Are You Ready to Sacrifice What You Want Now for What You'll Need Later?

So, what is the real way to measure personal wealth? The yardstick is whether our investment income covers our living expenses.

If it does, then you are well-off. If your investment income is 2x or more greater than your annual income, then you are well and truly rich!

I know I have now lost 99% of you. The thought of the relative deprivation that such living would require is probably too difficult for many of you to face squarely.

And that's OK; not everyone possesses the necessary discipline that it takes to acquire true wealth.

Don't beat yourself up about it. But, by the same token, don't fool yourself into thinking that you are rich just because you have a big salary, a shiny Benz and a nice sprawling McMansion.

We both know you are one pink slip away from financial Armageddon.

I'm here to tell you that you don't have to live that way anymore.

Downsizing is only painful when you are not emotionally prepared for it. Once you make the decision to be "for real" rich instead of "pretend" rich, the decision to downsize instead of "super-size" will be an easy one.

Downsizing Your Spending = Super-Sizing Your Wealth

Don't squander the opportunity that you've been given by being blessed with the ability to earn a large income. You have a huge edge over every other person earning less than you. You blow that edge when you over-spend and under-save.

Remember -- even if you win the lottery or increase your income dramatically, but refuse to spend less than you earn and refuse to save and invest surplus capital -- you will never be rich.

You will never experience true financial freedom, and you will always be at the mercy of your spending habits, your employer and the economy.

It's always a good time to re-evaluate your financial plan, but especially with the dawn of a new decade just around the corner, there's no time like the present to plan to become a millionaire. You'll thank yourself in 2020!