But there also seems to be point in our lives when our relationship with money - our 'money paradigm', if you like - changes significantly. We see money in a new way - a bit like looking through a telescope the 'wrong' way, and then the 'proper' way.
I like to think of this point as a Wealth Inflexion Point - a point beyond which the old 'paradigm' of your relationship with money changes. From that point wealth creation can truly begin. And probably not before.
When you have very little money it is difficult to imagine how you can become rich - it just seems so unobtainable. This is what I mean by looking down the 'wrong' end of the telescope.
For many years - probably the first third of my life - I had very little money. This did not stop me from doing a whole range of adventurous things that I look back on with pleasure, and slight disbelief (working in a Kibbutz by the Sea of Galilee, sailing across the Atlantic; being delivered by a yacht, penniless, to Dakar, Senegal; working in Mauritania; crossing the Sahara via Timbuktu; hitching across the US, etc.). But having pushed the 'adventure' button repeatedly (with little left financially to show for it), the time did come to think more about the future and how to spend the next two-thirds of my life.
Fortunately, I did have the habit of making some savings when I could, mainly to fund my adventures. So when it came to going back to school, I was not completely penniless. However, it was still a few years before I had a 'proper' job and some stability to be able to think about anything approaching a financial plan.
The 'usual' things then happened: girlfriend, wife, house, children: all - fortunately - accompanied by relatively well-paid and interesting jobs.
I was (unknowingly) approaching the 'inflexion point' but had not yet reached it.
For me, the breakthrough was paying off our mortgage: that is a milestone in anyone's life and had been my short-term obsession. In the event it was actually an anti-climax because the question was then: what next?
My thinking was getting close to the crucial breakout point.
Almost without noticing it, our net income - what was left after normal expenditure - had been growing as our mortgage costs had fallen. What is more, our savings had started to yield a significant passive income.
The realisation finally ocurred: what would I do if I lost my job? What would we live on? A new paradigm was needed.
The wealth inflexion point was reached. I decided on a more ambitious financial plan: I needed to build up a portfolio of cash and investments that would provide an increasing 'passive' income stream that could - eventually - replace the income from my 'day job'. This meant pressing hard on the expenditure brake and accelerating the 'passive' income by becoming a DIY Income Investor.
This happened around 2002: ten years later I had stopped work early and was living on my passive income - with a few years to go before taking my pensions. With a typical UK male life expectancy of 85, that is the next third of my life paid for.
Actually I don't think of myself as 'wealthy' or 'rich' - although statistically we are a pretty highly ranked household - but rather financially free: able to do what we want (within reason), rather than what we have to do. Of course, this means having financial resources but also health and a stable family environment. And sometimes you are wealthier that you realise: as Lao Tzu put it:
"If you realize that you have enough, you are truly rich.”
Unfortunately I don't think that there is a short-cut to this process - it is a process of self-realisation and it will be subtly different for everyone - but you can prepare the ground:
- get a good job (I know, easier said than done) or create your own!
- find a good life-partner (yes, I know - even harder)
- cut every aspect of your spending (then cut it again)
- pay off all debts
- increase your savings
- learn to invest successfully
And be prepared for a life-enhancing experience.
I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.