The acquisition of wealth is simple and not new but few people follow the simple rules in acquiring wealth. Let us start with the simple premise that we all desire to be rich, if not for the money itself but for the things that money can buy and the liberty to do whatever you please. If you have ever thought to yourself “I wish I were rich” or you loathe the sight of your bank account balance, then this guide is for you. There is no secret to riches, but it does require the virtue of patience and strong determination. The guidelines are as follows and should not be taken lightly. This is the only way to create wealth and maintain it. Again it is not new and you have most likely heard some variation of these before. This time, Act and follow these guidelines to wealth.
1. Start to build your savings
2. Budget your expenses
3. Learn to invest successfully
4. Protect your wealth
5. Own your home
6. Develop a strategy for future income
7. Educate yourself to earn more
Start to build your savings
Take a part of all you earn and keep it for yourself. You need to work for yourself and not for the benefit of others. Too many people spend 100% if not more of what they make and save nothing for their future. People say they are unable to save because their expenses eat up all of what they make or they do not earn enough. This is simply not true; rather, it is an excuse to cover up their failing efforts. Take a sample of 100 average people and what you will find is varying incomes but there will be one thing in common: little savings. So, if one person can live off $35,000, why can’t the other who is making $50,000? Human nature has one huge handicap; given the ability to spend on wants, we will. Rule number 1 is that you must keep 10% of all that you make and save it. It might seem hard at first but soon it will be natural for you. Your regular spending habits will adjust to the lesser amount. If you can save more do so, but do not save too much because this will lead to you depriving yourself of many of the good things this world has to offer. Start this now and do not hesitate. None of the other rules matter if you cannot manage to pay yourself.
Budget your expenses
A budget is an aid in helping you manage the 90% of your income that you are not saving. It is not something that should be terrifying or something that leads you to deprive yourself. It simply forces you to prioritize your wants and needs. Your needs will come first and might account for 60% of your income for example and the remaining 30% will be for your wants. Needs are things like food, rent, clothing, etc. Wants are things like drinks with the guys, new perfume or the VIP cable package. You can still decide to purchase the VIP cable package but you must ensure that it does not eat up more than 30% of your income. The budget helps you live comfortably on 90% of your income; it is not something that you should run from.
Learn to invest successfully
I will admit that the first two rules are tough ones because it requires you to change the habits that sometimes define who we are and depending on how much you like new shiny things, it can really take a toll on you. Learning to Invest is fun, at least for me, and very rewarding. Where saving 10% of your income is not a strenuous mental activity, investing can sometimes consume much of your time. Investing is also an emotional test as well in that investing tests your willingness to take on risk and feeling of loss. The whole objective in successful investing is to make your savings work for you i.e. to be rich means you need to make your savings multiply so that even without your 10% of income, your riches continue to grow. Putting your money under your bed and sitting idle is not how rich people manage their money and neither should you. Also, with wealth comes a multitude of investment opportunities so be sure to only align your endeavors with those that have experience in investing. Successful investing is not a career choice or a profession; it’s a life skill you must learn just like doing laundry, or making food for yourself. I must repeat that so you do not take this lightly; Successful investing is a mandatory life skill. Obviously, I cannot cover the ‘how’ to invest successfully but I will say that you must. Read some of my other material on the question of “how”.
Protect your wealth
Protecting your wealth is key and relates well with the previous rules. Once you accumulate a small sum, the last thing you need is for that sum to be taken from you. You worked hard for your money so do not be careless and let the allure of high flying returns on your investment cloud your judgment. Protect your wealth because a little bit of caution is better than a lot of regret. You must aim to achieve a reasonable return on your investment and ensure your principle remains intact. I do not mean you should invest in Guaranteed Investment Products offered by a bank for example but make sure all your investments have a margin of safety.
Own your home
Home ownership is a very sought after goal and for good reason. Some people spend their entire lives renting the home they live in. Renting is not a bad idea during certain times in your life and cannot be avoided but owning your own home is the start to having an estate and is part and parcel of acquiring wealth. The point is, being rich means having wealth that works for you and renting your home means, you are working for someone else.
Develop of strategy to future income
We will all be old one day and will therefore be limited in our ability to earn an income. This is obviously not limited to old age, but perhaps sickness or disability can also prevent us from securing an income. The point is your wealth must prove to be your income one day. We all talk about retirement like it’s a very long vacation relaxing in the sun. Well, let me tell you, vacations are expensive. If you want to spend your retirement vacationing, you will need more than just your home paid for. You will need a sustainable income that provides for both your needs and wants.
Educate yourself to earn more
The six rules I just outlined are the beginning of much study and practice in the art of Acquiring Wealth. It does not stop here. You can always learn more whether it be learning new skills related to your day job, education to get a promotion, or learning how to better invest your savings to make your wealth multiply more rapidly. The idea here is never be idle. More opportunities knock when you are better equipped to take advantage of them. Be prepared and always desire to increase your wealth.
In summary, wealth does not come on the whims of good luck or a hefty inheritance; it is the result of desire, patience and determination. If you have any questions or would like to chat, please feel free to contact me at email@example.com