When you hear the word wealth, you probably think of people with mansions, fancy cars, and overly-expensive clothes, the kind of people who seem to be swimming in money. Most people would love to be wealthy, or even just have a bit more money.

Why should you build wealth? Wealth building is a great way to build financial security. Most people just think about all the stuff they can buy. It's great to be able to buy whatever you want whenever you want it, even very expensive stuff, but there is more to being wealthy than that.

Wealth building creates financial security. Financial security means you no longer have to worry about how you're going to pay your bills, you don't have to live paycheck to paycheck, and in the case of an emergency, you are covered. So many problems stem from lack of money and removing that worry can be incredible.

Another great benefit is that you can become more generous and giving. The more money you have the more you can give. Generosity may not be important to some people, but to those who take advantage of it and give whenever possible, rewards are plentiful beyond monetary benefits.

In order to start increasing your net worth, you must first get rid of debt. I moderate, low rate mortgage is fine, but beyond that, you must pay off all debt as soon as possible. This debt, whether it's credit card debt or student loans, is eating away at your net worth due to high interest rates.

Once you have paid off your debt, you need to stabilize your future and present situations. Save 8 months worth of living expenses to ensure you are safe in the case of an emergency such as a medical emergency, car repair, or job loss. Also, set up a retirement fund, preferably a tax advantage fund, and begin saving for your future retirement.

Once you have the basics ready, you can begin building wealth. Look at your income and expenses. If your income is more than your expenses, you must take this money and start saving it. This is the seed for your wealth.

If you break even, or have more expenses than income, you must either cut back on expenses, increase income, or both. Ideally, you will do both as much as possible. Self-made millionaires are careful spenders as well as big earners.

Try to work your way up to big savings each month. For example, start by saving $100 the first month and then consistently add income such as from a raise or getting a better job, and deduct expenses that are not important or necessary. Increase that difference as much as possible.

The higher that number is, the faster your wealth building efforts will build. If you can save $200 a month, it will take you a long time to get rich, even if you are young. If you can save $2,000 a month, your wealth will increase at an incredible rate.

Your age is also going to have a lot to do with it, as well as when you want to have wealth. If you want to be wealthy in 5 years, you're going to have to work really hard. On the other hand, if your 25 years old and want to be wealthy and retire by 50, you have 25 solid years to save and invest.

Investing is the largest factor in wealth building. If you can invest all the excess money you have in solid, high return investments, your wealth will grow exponentially. If you are interested in stocks, bonds, and other investments, you might want to take the time to learn how to invest in them. Some people are able to earn above average returns on their own.

If you are okay with earning average returns (the historical stock market average return is about 10% to 13% per year) and you aren't interested in spending a lot of time and effort on investing, you can invest in mutual funds. A good index mutual fund will allow you to earn the average market rate consistently and you don't have to worry about choosing or diversifying your investments.

How to Maintain your Wealth Building

The great thing about wealth building is that it gets easier and faster as time goes by. The more wealth you have, the faster it will grow as long as it's all invested. For example, someone that has $1,000,000 in investments and earns 10% a year will make $100,000 a year in returns. They can either reinvest it or use it as income.

A person that has $100,000 in investments and also earns 10% a year, will make $10,000 a year in returns which is considerably smaller. The larger your net worth grows, the more and faster it will continue to grow. This is called compounding.

Maintain your wealth building by constantly continuing to take advantage of compounding. If you can, increase the amount of money you invest from your paycheck whenever possible, if only to combat inflation. If you're investing $2,000 a month and you get a $3,000 raise each year, try to increase your monthly investment by $100 or more.

Wealth building will become tedious after a while, but don't give up. As soon as you give up, stop investing, and start spending your wealth, you will get less and less wealthy. Before you know it, your investments will be making enough that you can start using some of your returns for fun things like vacations, cars, houses, etc.