It really is an easy formula for building wealth.

It might take many years to build the wealth, but it can be done if you simply minimize your expenses and maximize your savings and investments.

Of course, the plan starts with the ability to make some money. Building wealth is much easier if you make lots of money. However, the amount of money you make does not determine if you will build wealth.

For example, a postal carrier can save money for a couple of decades and end up with a nice retirement nest egg. A millionaire can end up with nothing if he spends all of the money on expensive cars, vacations, etc...

To me, minimizing expenses is all about having a plan and having the confidence to execute it. If you have a stable income, you can put a lot of that money into saving and retirement accounts unless you spend it all first. In terms of confidence, you need to get your self confidence by knowing you are building wealth without needing to show it to everyone. If you don't have the self confidence in your plan, you might buy expensive cars or clothes as a way to show your wealth. The problem is that expensive clothes and cars are not true wealth. In fact, they are often the source of high interest debt.

If you can manage to minimize you expenses, then it is just a matter of figuring out how to save and invest your money. This is fairly easy since the basic principles are laid out by many advisors, websites, etc... Here's the basic plan: invest in your 401K to get your matching funds, pay down your high interest debt, save enough money for an emergency savings fund that will cover you for 6 months in case your income is lost, maximize your yearly IRA investments, etc... If you get beyond these basic steps, then you are on the right track and are ready for the advanced steps.

The most important thing to remember is that compound interest will work for you as long as you save for the long term. Your nest egg will make a certain amount of money each year which is added to your nest egg. Each year, that nest egg grows and has the ability to generate larger amounts of money that is added to the nest egg. A couple of decades into your saving and investment efforts, this compound interest really starts to pay off.

Don't wait to start building wealth. Time is a huge factor in how much compound interest your investments will generate.

Start minimizing your expenses and maximizing your savings and investments right now.