There are a few things that can really affect your wealth, but I think there's one factor that's more important than all the rest.
If you can pick out an Amazon, Google, Facebook, Altium Limited (ASX: ALU) or Appen Ltd (ASX: APX) early on then you'll do very well. But I think there's something even more important than that.
How much you save is arguably the most important factor for your money.
In other words, spend less than you earn.
How much you spend versus how much you earn could be the key for how much wealth you accumulate during your life.
If you save $5,000 a year you're doing well. But it can make a huge difference if you save $10,000 a year or $20,000 a year, or even more. If you save $5,000 a year and compound it at 10% per annum you will end up with $822,000 after 30 years, which is fantastic. But if you save $10,000 a year and compound it at 10% a year for 30 years you would end up with $1.64 million.
How much you save makes a huge difference. A household saving less money would have to generate extremely impressive returns to keep up with a household saving more money.
Remember, it's not necessarily about which household earns more money. A household earning $120,000 might save $10,000 a year and a household earning $100,000 might save $20,000 a year.
Which household will end up generating wealth quicker? Over time the lower-spending household could actually retire even earlier than the higher-spenders because they would need less total wealth to sustain their desired yearly expenditure.
But, at the same time, don't feel like you need to hoard every last dollar. The idea is to only spend money on necessities and other things that make you truly happy.
