Build, Multiply And Preserve

What's really interesting in having systems in place for many of the things we do is that they put structure into our actions and guide us towards achieving a clear objective.

With systems, we recognize patterns, learn what works and what doesn't, implement necessary changes and keep moving forward.

On a broader and general view, this is how many people operate by default. But it is usually subconsciously or unconsciously.

Becoming individually aware of this mechanism can speed up the process into building better systems outside the default mode of operation.

When it comes to the wealth system, there generally seems to be three stages or processes to it. Which are build, multiply and preserve. Of course, this is financial wealth we're talking about here.

I think the multiplication aspect isn't applicable to other aspects of wealth, since some of them are not easily quantifiable(e.g health).

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The Three Stages Of Wealth

The building stage is mostly about earning money to cover our basic needs and then some. It's basically about building a financial foundation that we can near comfortably rest on and gradually get outside of survival mode.

Interestingly, this survival mode is one of the main driving forces in the building stage but we eventually come to realize that it gets too taxing the more we tap from it, i.e unsustainable mode of operation in the long run.

Words that best describe this stage are being proactive or going on the offensive.

In the multiply stage, we come to understand that building never ends, which can be good or bad depending on how we look at it. The bad is that building can be linear or non-linear, but the equation is always that you put in effort to get rewarded, i.e trade time for money.

Changing this equation often requires employing leverage, such as investing to multiply our returns without directly trading our time for money. This allows us to scale our wealth creation beyond the limitations of our own hours and effort.

If there's something truly magical about the multiplication stage, it's the freedom to transcend the traditional limitations of our own time and effort attached to work. This stage also unlocks the freedom of choice.

Just like the team that celebrates prematurely and loses their lead, we can easily fall into the trap of complacency when it comes to wealth.

Building wealth is crucial, multiplying it even more, but without a focus on preservation, all our efforts can end up in vain.

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As the saying goes, "the greatest wealth is the wealth you keep." The preserve stage is about shifting our focus from aggressive accumulation to strategic protection.

It's basically a defensive strategy to ensure our wealth weathers life's inevitable storms and remains a source of financial stability both now and in the future.

In practice, I think it mostly boils down to decentralized diversification in uncorrelated systems.

Beyond The Stages

While the stages may appear sequential, they're in no way rigid compartments. Because the reality is more nuanced.

You might dabble in multiplying while still building your base, or dipping your toes in preservation strategies even in the growth phase.

This is merely a framework and it can serve as a tool to evaluate our current financial standing, identify areas for improvement, and adjust our approach as our financial circumstances and goals evolve.

Which stage is your favourite?


Thanks for reading!! Share your thoughts below on the comments.

Posted Using InLeo Alpha