For many of us, wealth creation remains an ambiguous if a well misunderstood word. We tend to think that wealth creation or the pursuit of wealth is simply about multiplying our money and re-multiplying it time and time again. While there is no denying the significant contribution to wealth that money provides, wealth creation is much more than making more money. Here is what wealth creation is all about.
One, you need to generate some disposable income. This means that you need to revisit your budget and make some savings which will translate to disposable income available for investments. You need to create more than one source of income because wealth creation also heavily relies on financial independence. It is important that you make some money available for investment.
Two, manage your expenses. This is where financial discipline comes in. Compulsive buying needs to be checked. We all like to treat ourselves to the things we lie and well we deserve it. But if we are serious about being wealthy then we need to do that a little less often and instead save and apply that money to investment ventures. Wealth creation will demand some sacrifices on our part. Nothing good comes easily.
Three, you need to maintain whatever assets you have and grow them. Getting something is one thing. Maintaining it while even growing it is a lot more difficult. Wealth Creation is more about acquiring, maintaining and growth. Procure an asset, secure it and even let it grow as you seek other assets.
Four, you need to properly manage whatever liabilities you have in your life. At one time or another we are all inclined to borrow to pursue certain ends. However, how we apply our borrowed money or how well we utilize it will determine if we will reap from it or end up reducing our assets in the long run when we balance our books. Debt is good, but only if utilized carefully and thoughtfully.
Five, another aspect you need to manage is the risks associated with the assets you accrue. If for example you are a stock market investor, you need to manage the risks involved in stock trading so as to ensure you don’t end up losing part or all of your investment. In other words you need to secure and jealously protect your assets and investments if they are to work for you and generate you wealth.
No, it’s not all about money making if you are in pursuit of wealth. You need to do a little more than that to achieve your dreams. Keep learning. Keep growing.