Wealth Building 101 (Part 1)
“Wealth doesn’t come from what you have. Wealth comes from what you DO with what you have.” ~~Barbara Huson
In my last post I shared the truth (as I see it) about Wealth Building.
Wealth Building is a lot simpler than you think.
It doesn’t take a lot of time to get smart about money.
It doesn’t take a lot of money to create wealth.
And it’s never too late to begin.
In this series (Read the beginning HERE), I’ve focused on the psychological, spiritual, and emotional aspects of success. But having a basic knowledge of money management is vital to Sacred Success. In these next two posts, I’m going to give you a crash course on using money to make money.
Wealth Building Lesson 1
There are only five places to invest, otherwise known as asset classes. The five asset classes are:
Stocks
Bonds
Real Estate
Cash
Commodities
That’s it! Only five categories you need to understand.
Wealth Building Lesson 2
Things get even simpler. The five asset classes fall into only two categories. There are only two different ways to invest. You either (1) Own or (2) Loan. So, let’s break this down by asset class. See if you can guess which category each class falls into before you read it below.
Stocks—If you guessed “Own”, you’re right. When Company X wants to raise money, it sells shares in an initial public offering (IPO). Companies that sell stock to shareholders are called public companies. When you buy shares in Company X, you actually own a piece of the company. If Company X makes money, so do you. The opposite is also true but we’ll cover risk later.
Bonds—The answer for this asset class is: Loan. Another way that an organization— whether it’s a company, a municipality, or government—raises money is to ask the public for a loan. They promise to pay you as the lender, or bondholder, back in full at the agreed upon time and also pay you interest on the loan.
Real Estate—This one is easy. Real estate is something you Own. Real estate has made people rich but no guarantee. And there’s an important drawback to owning real estate. It’s not very liquid. You may not be able to readily liquidate properties for cash because it takes time to sell. Note: I make a distinction between your own home and other properties you may own. I don’t count my own home as an investment because, even though the value may go up, I don’t want to have to sell it if I need money.
Cash—This one is a little tricky: Loan. Unless all your money is tucked away in a hiding place at home, you actually lend it to the bank when you open an account. In return, the bank promises to pay you interest, otherwise known as yield. Cash also includes certain “cash equivalents” like CDs (certificates of deposit), treasuries, and money market funds.
Commodities—This is one that most of us won’t deal with as an investment but it’s: Own. These are tangible products, like pork bellies, wheat, gold, silver, oil, etc., which are traded on various commodity exchanges. There’s an old joke: How do you make a small fortune in commodities? Start with a large one. This means that commodities are extremely risky so unless you are very rich and work with a pro, you probably won’t be investing in them.
Wealth Building Lesson 3
While keeping all your money in cash, or under the mattress, may seem simpler and safer, over time it’s extremely hazardous to your financial health. Our biggest risk as women is outliving our money due to inflation and taxes taking it away faster than it grows. Inflation is like the hungry caterpillar in the children’s book but instead of leaves, it keeps nibbling away at our savings until there’s hardly anything left. Since 1926:
Inflation has averaged 3 percent annually (yes, it’s higher now but we’re taking an average here)
Cash has returned about 3 percent annually (and, depending on the year, even 3 percent seems generous)
Stocks have grown about 10 percent annually
Bonds return about 5 percent annually
Real Estate has grown about 6.2 percent annually
It’s easy to see that keeping all your money in cash won’t grow fast enough to outpace inflation.
Wealth Building Lesson 4
Now’s a good time to explain the Rule of 72. This rule lets you figure out how many years it’ll take to double your money. Here’s how it works:
Divide the Interest Rate (the percentage of the loan that a borrower pays to the lender) or compounded return (the accumulated return when interest paid on the original amount also earns interest) into the number 72.
For example: You invest in a mutual fund that returns about 8 percent annually. Eight divided into 72 is 9. It will take 9 years to double your initial investment.
If all your money is sitting in the bank, paying at best 3 percent interest, you’ll need 24 years to see it double.
It’s easy to see the risk you take by only investing in cash. And that brings us to the next Wealth Building Lesson—Risk. Join me next time for that discussion and 4 more Wealth Building Lessons.
Sacred Success: The Next Evolution
October 22-25, 2026
An in-person, 4-day immersive retreat for women ready to harness their power, live their purpose, and create abundance.
Through a unique blend of Spirituality, Psychology, Neuroscience, and Quantum Physics, you’ll discover a radically new paradigm for harnessing both your immense power and the invisible forces shaping your life—so you can stop working against them and work with them to consciously create the life you truly desire.