ADDYNAMO

Thursday 13 March 2014

How To build Wealth Effectively As A Wealth Builder


The question these days on most people's minds is how does one build wealth? Well after much study and research on the matter, i will tell you what i know about building wealth effectively.

First, you must have a good source of income, or multiple income streams. This is important because the primary requirement to be a good wealth builder, is to be a good saver. You must be able to account for how much you make, and how much you spend, and plan how much you can comfortably keep aside in savings every month, it does not matter if its N100, or N10,000 you put aside in savings, developing the habit of keeping money aside in savings is what is important. Drawing up a simple budget like this that you can stick to is a major step towards your financial independence.

It is important to have the right perspective towards savings. As hard as it may seem sometimes, it is the paramount priority of every wealth builder. Saving is actually deferring present financial pleasure for future financial gain. It takes discipline, courage and resolve. We will discuss How to save effectively in another topic.

As you start saving, you will see your savings grow over time, and soon enough you will realise that just savings alone is not enough to get you to the level of wealth you aspire. So the next thing to do as you build up your savings, is to seek good investments you can put it into that will yield greater returns over time. As the saying goes "it takes money to make money". At this point you have two options. You can either improve on your financial literacy and tackle investments head on by yourself, or enlist the help of a financial advisor. Though the second option will cost you money to hire a good financial advisor, yet it is the preferred option because of the amount of experience the financial advisor will be bringing on board, the risk of going into any bad investments or poorly performing investments is greatly minimized. Financial advisors are trained to seek out most profitable investments for their clients, and hiring one can only be of benefit to you.

Investments you can consider doing are:
1. Investing in the stock market
2. Investing in index funds
3. Investing in mutual funds
4. Investing in foreign or emerging markets
5. Investing in real estate

Also personal habits must be carefully observed, to avoid squandering the wealth you are building without realizing it. Here are some helpful tips on some pitfalls to avoid.

a. Learn to live within your means. It is a hard lesson to learn for a lot of people dealing with their personal finances, but the idea is to live within your means now so you can live above your means later.

b. Never make purchases on an impulse, especially expensive items. Always think it through before making purchases, is it of a major benefit right now? Do you really need it? Give it a waiting period of at least a week, before making that purchase, that way you have had all the time to think wether its really worth it or not.

c. When shopping for items for the home, always make a list before hitting the shopping mall, and stick to buying only what you have on the list.

d. Be ready to learn more to increase your earnings potentials.

e. Learn to use your money. money isn't an end in itself. It is a means to an end, and its true value lies in what you can buy with it, not in how much you have by the time you die. So learn to enjoy life while you're living it.

f. Read a lot, read about almost everything. know what's going on in your industry (trends, new concepts), learn what's going on in the World. This is a global economy and likely whatever is happening in the world is affecting your industry.

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