Financial freedom is a goal many people strive for. In fact, so many people dream about being financially free and that so many books, seminars, and workshops on building wealth have been created to help people find ways to achieve this goal. These products have become an entire branch of the self-help industry and it continues to grow. As the industry grows, the methods become more complex and the wealth-building systems prescribed to people become more and more convoluted. With all that going on, it’s very easy to forget the most basic principles of financial freedom. Some people are so busy trying to find the next big financial thing that they often overlook the simplest and most effective means towards wealth.

Maybe the key to financial freedom is not in finding more complex systems, but in getting back to the basics. Let’s take a closer look at how wealth is built to determine the key principles in building wealth.

The first principle you should keep in mind is that in order to build wealth, you must earn more than you spend. If you’re spending juts as much as you’re earning, you’re not going to be financially free anytime soon. You need to either earn more, or spend less. Neither of those methods is easy, but between those two, it’s much easier to learn how to spend less than it is to find new sources of income.

Wealth-building does not necessarily require a big income. You often hear the saying, "it takes money to make money." There is some truth to that statement, making the right investment at the right time can result in tremendous wealth, but there is more than one way to gain wealth. For the most part, financial freedom is achieved through discipline. If you can find ways to eliminate unnecessary spending, building wealth might become easier for you.

Another aspect of wealth-building that people find difficult to understand is compound interest and the value of saving small amounts of money. The truth of the matter is that saving small amounts of money add up to saving large amounts of money. If you spend $3 on cigarettes every day, you would save $21 if you didn’t smoke for a week, $84 if you didn’t smoke for a month and over $1,000 if you didn’t smoke for a year. Imagine if instead of smoking for 20 years, you saved all that money instead. Imagine if cigarettes were not the only thing you eliminated from your expenses. The small amounts that you save by eliminating unnecessary expenses can snowball into an amount big enough to allow for a meaningful investment – a step closer towards financial freedom.

Compound interest can really leverage your small income into something greater. Unfortunately, it can also get you into trouble. Compound interest is the same principle banks use when you take on credit and loans. The small debts you incur on loans can snowball and bankrupt you. One very important principle of building wealth is to stay away from unnecessary debt. In fact, debt should always be your final resort. Business people find ways to make debt productive, but unless you have the financial savvy to understand interest rates, you should stay away from debts and loans at all costs.

The secrets to financial freedom are actually quite simple: spend less, save, and don’t get into debt. In other words, if you want to build wealth you just have to be smart with your money. Seminars and books about wealth-building talk about these with more detail, but on the most basic level, each person who wants to start building wealth has to start by spending less, saving, and not getting into debt.