Many of the people who were most affected by the pandemic were already living paycheck-to-paycheck, and when put out of work, the lack of a consistent monthly income hit extremely hard. Having no emergency money from the start left many of these people relying solely on stimulus checks and government aid. 

It wasn’t until the pandemic hit and the stock market started making headlines that I started to become interested in the study of money and how it works. I realized just how life-changing developing the proper money fundamentals could become. 

I finally understood why the wealthy continued to separate from the herd. It’s not entirely because of income; it is more towards what the wealthy do with their income. While it is easy to impulse buy unnecessary items, like when I overspend on Chick-fil-a, the wealthy save and invest their money which allows it to grow over time. I then reached an epiphany that the wealth divide results from these choices compounding with time. 

This conclusion came full circle for me as I realized that if I change my money mindset, I could finally begin accumulating wealth instead of throwing it away. The key though is being consistent. The wealthy aren’t wealthy because of overnight luck. They are wealthy because of the decisions they make on a daily basis. 

 With better decision-making, I can have more money available to use. Some of that extra money can be used for a rainy day fund and the rest could be used to invest. What I’ve noticed about wealthy investors is that they all started investing early. With every passing day, there is less time for investments to grow, so by starting now I can ensure that I am maximizing my opportunities. There’s no time to sulk and think about past mistakes and where I could have used money better. I just need to put them behind me and look forward.

If we take the extra money we have saved by making better, wealthier choices we can invest it. Looking at the average annual return of the S&P 500, or the top 500 largest companies on the stock market, we see that it is 9.8%. This means that for the “regular” investor, it is pretty attainable to reach about a 7-10% return on investment each year while keeping the risk of losing money relatively low. This means that about every 8-10 years, you will double your money. Imagine just how much extra money you can have down the road! It is important to note that the ultra-rich often make very risky investments for larger upside when they can afford to lose that money. But for you and me who just want reasonable growth with lower risk, simply investing in an index fund will be fine.

Many people may argue that money doesn’t lead to happiness, and I would agree. It is important to put your well-being as number one on your priority list. But, it is important to consider just how significant of a role money can play in your future freedom. Money has the unique power of opening doors, and by changing the way we view and use money, we can all have the opportunity to open more doors than ever before.