A high-risk habit
Barkley is not shy about his “love” for gambling. He told Sharpe he used to go to Las Vegas and play $25,000 a hand, determined to win $1 million dollars in a single night.
“There’s probably been seven times that I won a million dollars,” he said. “But there’s probably been 25 times I’ve lost a million."
He went on to explain some of the feelings he experienced. He said, “I got such elation [by winning], but then when I would lose a million, I was so depressed … No matter how good it feels winning, when you lose, it just f—-ing sucks.”
When his habit got “out of hand,” Barkley quit gambling and his friends challenged him. He recalled them asking why he wouldn’t quit when he had won a significant amount and why he always had to chase the $1 million mark.
“Gambling is really just peaks and valleys,” he told Sharpe. “You’re so excited when you’ve got all that money laying in front of you, but [on the flip side, when you lose] like you’re depressed for a week … and then you’ve got to send a bill to your financial people and they yell at you.”
The most money Barkley ever won in one go was $5 million. But the financial risks he took over the years to achieve that gambling goal may have overshadowed his success. Here are three ways to build your wealth without relying on the luck of the draw.
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Read MoreGet a grip on your finances
Building wealth is easier when you have a strong financial foundation. This means: getting your debt under control and setting a budget.
You need to understand what your debt profile looks like and where higher interest rates — perhaps on your credit card or your car loan — might be weighing you down and outpacing the money you’d make saving and investing any excess income.
Creating and sticking to a budget that breaks down your monthly income between necessities, wants and savings and investments is a great way to get a grip on your finances.
The more money you can allocate to savings and investments, the faster you may be able to achieve your wealth generation goals.
Invest for passive income
Even if you earn a six-figure salary, your income alone is often not enough to achieve wealth. You have to put your money to work — and the easiest way to do this is to invest.
Those who are new to investing often get their feet wet with mutual funds or ETFs, which bundle together a diverse portfolio of investments. These are generally considered less risky than trading individual stocks.
You don’t have to commit a lot of money at first. You can start small and invest your spare change, and maybe generate passive income through dividends without having to lift a finger. There are also plenty of apps that can help you dip your toe into the investing waters.
One thing to be cautious of is trying to ‘time the market’ and letting your emotions drive your investing decisions. The stock market is a volatile beast that reacts to countless variables, such as economic growth, interest rates, political events, consumer sentiment, corporate earnings, and so on. Attempting to one-up the market can quickly resemble Barkley’s gambling habit of trying to beat the odds at the table.
If the idea of managing your own investment portfolio is too overwhelming, consider working with a financial adviser who can walk you through the basics and help you make investment decisions that have the best chance of meeting your wealth-building goals
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Learn moreGet into real estate
Homeownership is an effective and tangible way to build real wealth. While the initial investment and early mortgage payments can be daunting, that is often outweighed by the long-term positives of property appreciation, building home equity and potential tax deductions.
If you want your real estate portfolio to grow beyond your home, you can invest in a residential real estate investment trust (REIT). REITs are publicly traded and they collect rent from tenants and pass that rent on to shareholders in the form of dividends.
Another way to get into real estate is to use an online crowdfunding platform. These allow investors to pool their money together to buy property (or a share of property) as a group.
If you don’t want the pressure of making real estate investment decisions yourself, investing apps with robo-advisors can help you create a diversified real estate portfolio while keeping your fees low.
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