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Build wealth you can give away
Three humble strategies, and two ordinary women who quietly proved that all three work.
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01 The idea
Wealth you cannot give away is only half of it
Finance defines personal wealth simply: the total value of what you own, minus what you owe. Cash, a home, a car, investments and shares, less the mortgages and the loans. It is a number, and it buys you freedom.
Pittard asks for one addition. True personal wealth is that number plus the part of it you can give to people who will never repay you. The first part takes care of you. The second is what makes the number mean something.
Do not let the going figures worry you. Charles Schwab's 2022 survey found Americans put "wealthy" at an average net worth of $2.2 million and "financially comfortable" at $774,000, both down from 2020. Those are opinions, averaged. You decide what enough looks like for you.
Write down your own number for enough, then write a second number underneath it: the amount above enough that you would be willing to release. The gap between them is where this book does its work.
02 The proof
Two ordinary salaries, two quiet fortunes
Genevieve Via Cava taught special needs students in New Jersey and died at 89. Her estate came to more than $3 million. She left $1 million to the Dumont School District, earmarked as scholarships for special needs students going on to further study.
Sylvia Bloom was a legal secretary in Brooklyn who died at 96. She had accumulated more than $9 million, spread across eleven banks and three brokerage houses. In 2018 it emerged that she had given $6.24 million to the Henry Street Settlement, the largest single individual gift in that organisation's history.
Neither woman had an impressive job title. Neither announced what she was doing. Both worked one job for most of a lifetime, lived below their means, and let time do the rest.
Could light up a room, had a killer smile, and was devoted to her students.Colleagues on Genevieve Via Cava, The New York Times, 2018
03 Strategy one · body and mind
Get healthy, because health is what buys you time
Search for the link between health and wealth and you will find the usual story: rich people can afford to be healthy. Organic aisles, gym memberships, private specialists. That direction is real, and it is not the useful one.
Bloom and Canning's study of nations found the arrow runs the other way too. Healthy people are more productive and miss fewer days. They spend less on treatment, so they keep more of what they earn. They expect a long life, so investing in education makes sense to them, and the returns have decades to arrive. They plan for retirement because they expect to be there.
Via Cava reached 89 and Bloom reached 96. Bloom took the subway to work in sun and snow, retired at 96, and moved into a residence where she could play bridge. Long working lives are what turned two modest salaries into millions.
Higher income gives greater command over many of the goods and services that promote health, such as better nutrition and access to safe water, sanitation, and good quality health services.Bloom and Canning, Science, 2000
Stand up. Stretch your arms and legs, march in place or do a few jumping jacks, breathe deeply, drink a glass of water. Then book the check-up you have been putting off. Short breaks of five to thirty minutes are enough, and nobody is too busy for that.
04 Strategy two · grow
A growth mindset is just a willingness to say there is more to learn
Carol Dweck named the growth mindset: the belief that intelligence can be developed through learning and effort. Her students who held it outperformed those who believed their ability was fixed. Effort mattered, but so did being resourceful.
Via Cava and Bloom both grew up through the Great Depression, when one in four Americans was out of work and ordinary people lost everything. Neither of them ever forgot it. Both spent the rest of their lives making sure it could not happen to them again.
They took different routes. Via Cava saved, relentlessly, buying only from the seventy percent discount rack and skipping holidays. Bloom invested. As a secretary managing her employers' portfolios, she bought small parcels of the same shares she was buying for them, out of her own salary, for sixty-seven years. Saving and investing both work. What neither survives is stopping.
Students need to try new strategies and seek input from others when they're stuck.Carol Dweck, Education Week, 2015
05 Strategy two · sustain
One skill is one point of failure
Growing your money is half of strategy two. The other half is growing what you can do, so that a bad year cannot take all of your income at once.
The pandemic made the argument for Pittard. People who baked at home sold what they baked. Professionals changed careers. Enrolments in online courses jumped, and so did the online jobs they led to. Nobody planned for that year, and the people who came through it were the ones with a second thing they could do.
If you want somewhere to aim, Indeed's 2022 list of fourteen jobs that can make you a millionaire includes entrepreneur, certified public accountant, insurance agent, real estate agent, day trader and actuary. Treat it as a prompt, not a prescription.
What talents do I have that I could use better? What skills do I need to improve? What else am I willing to learn? Answer them honestly, then pick one and start this month.
06 Strategy three · give
Giving is the only way wealth outlives you
This is the strategy that sounds like a cost and is not one. Smith and Davidson call generosity paradoxical: the people who give end up better off, and they mean that as a finding, not a sentiment.
Holding on feels safe because we learn to measure ourselves by what we own. Research on the biology of generosity points the other way. We appear to be built for it, with circuits and hormones already in place that make helping other people feel good.
Then there is what happens to the money. Via Cava's $1 million and Bloom's $6.24 million did not stop where they landed. They became scholarships, and scholarships become graduates, and graduates earn and save and, sometimes, give. Your wealth carries on growing through people you will never meet. Giving makes you truly wealthy because it proves you had something to give.
Those who give, receive back in turn. By spending ourselves for others' well-being, we enhance our own standing. In letting go of some of what we own, we better secure our own lives.Smith and Davidson, The Paradox of Generosity, 2014
07 Choosing where it goes
Pick the global problem you feel, then find it on your own street
The United Nations Foundation named five issues to watch in 2022: COVID response and recovery, poverty reduction, climate change, gender equality and the rights of girls and women, and growing humanitarian crises and conflicts. You are not required to care equally about all five.
Your values do the choosing. Read about the one that pulls at you, then look for its local form, because that is the version you can actually reach. Neither of our two models funded anything international. Via Cava gave to the school district next door. Bloom gave to a settlement house on the Lower East Side. Both gifts addressed poverty reduction, and both made news around the world.
Start where you live. Where the people you help go next is not yours to control, and that is exactly the point.
Choose one issue from the five. Spend an hour reading about it, then search for an organisation working on it within an hour's travel of your home. Write down its name. That is your candidate.
08 The whole book
Three humble strategies, one truly wealthy person
Pittard calls them humble because none of them needs an audience. They worked for a schoolteacher and a legal secretary who told almost nobody, and they compound only if you keep going.
Get healthy
Health is what buys you time, and time is what turns a modest salary into a fortune. More energy, fewer medical bills, more years to earn, save and invest.
Grow and sustain
Learn, put in the effort, stay resourceful. Save like Via Cava or invest like Bloom, and keep a second skill so one bad year cannot take everything.
Give generously
Pick the global issue you actually feel, find its local form, and fund it. What you give keeps growing through the people it reaches.
Pittard signs off with seven words. You are the world's true wealth. Believe.
Adapted from Three Highly Effective Wealth Building Strategies According To My Research
Gian Pittard · © 2022 DVFZ Training Consultancy Services · 32 cited sources in the source edition