Contrary to popular belief, increase in pay or salary does not necessarily lead wealth creation. The renowned boxer; Mike Tyson is an epitome of this. In our generation, many are constantly agitating for increase in pay (salary) or keeping changing their jobs, hoping that major shift will overturn their financial fortunes overnight. The saddest thing is that, irrespective of these changes, there is little or no improvement in their financial life. In view of this, I set out to study and read more about the world richest people and their secrets to wealth creation. Here is what I found;
“What you don’t know will hurt you”
First of all, increase your financial intelligence is the first step to wealth creation. What you don’t know will hurt you. And for the lack of financial intelligence, you will wallop in abject poverty. It is unfortunate, people go to school to study everything about lizards, snakes, rocks, Archeology to Zoology but have never read any credible book about finances. Becoming wealthy is not by chance; it’s obeying the principles of wealth. Financially successful people take time to study key financial concepts, learn the dos and don’ts about wealth creation. If you don’t master money; it will mar and enslave you. Not all advices are good, so be careful about your source, in order not to fall victim to unsuitable and potentially dangerous investments. There is no loyal friend than a book, so be a devoted student of money.Decide to read a book on finance today. The only way to get ahead is to get started.
Get A Constant Source of Income
“Never depend on your single income. Make investment to create a second source” Warren Buffet
The next step is to get regular source of income. You can achieve this by creating your own job; get a side business that does not demand your full time. More over selling something of value to others or get a job. If you are already working, think of other ways of generating passive incomes. Analyze the marketplace, know the needs and fill the gap. For example, if you are a tutor, think of writing books in your subject areas, organize classes, own a commercial tax or chain of restaurant. You are a broadcasting journalist, think of writing for international media in new and emerging markets in Africa like climate change, technology and agriculture. The list goes on just think.
Having A Saving Attitude
“Save money today and money will save you tomorrow”
Most of all, keep savings; the most successful key and the surest foundation to wealth creation is saving. The truth is that, irrespective of your income, you can always save. The foundation of capital generation for investing is savings. You must decide a particular amount of your income into your saving account. Say 10%, 15% or any amount. And the earlier you start, the better it gets because of compounding interest. Be discipline and go through the process, no short cut. Becoming wealthy does not happen overnight, so keep your eyes on the prize of financial freedom and be willing to sacrifice your future wealth with present wants. If you are going to struggle to do this yourself, let your accountant or boss deduct it from the source just like your tax payments into your savings account.
Diversify your portfolio
“Diversification helps to manage risks”
Successful investors also know not to put all of their money eggs in one basket—or two baskets, for that matter. They spread their wealth across a variety of investments. A diversified portfolio means that you can potentially take advantage of multiple sources of growth and protect yourself from financial ruin if one of your investments bombs. Kevin Olearny is one of the Shark Tanks richest. One of his key principles is that; never invest all your money into one business. Always, have a backup plan. The biggest mistake is when people raise huge capital and blow it off without any back up plan. Spend the Interest and never your capital.
Never lose Your Principal
“If you beat the system, it will bite you”
There is no quick fix to financial prosperity. If you beat the system, it will bite you. It is true there is price to pay and risks to take for wealth creation, but don’t be stupid and greedy; take only calculated risks and never gamble with your hard earned principal. Calculated risk in an investment venture is when your principal is guaranteed no matter what. When Richard Branson decided to compete with British Airways, he negotiated well with the plane manufacturers. Here is the deal; if I don’t succeed with the competition, I will bring back all the flights to be re-sold and that was the deal. Fortunately, his virgin Airlines succeeded big time. The point to note is, learn to take small risks for great rewards. For instance, if you invest in lands or real estate, pig farms business, there’s little to no risk of losing your principal. Then, you make it a gospel never to spend the principal, only the interest.
There are many secrets to wealth creation, however, the above secrets are the most common and highly recommended by many rich people. I hope that following these principles and knowing that anyone can become wealthy, will unlock and ignite your passion towards wealth creation. In the coming weeks, keep watch over this page, I will be continuing the series on wealth creation.
Schandorf Adu Bright is a leader, motivational speaker, change agent and columnist. Currently, he is the Value Chain Director at Farmerline Ltd, a technology and content provider company based in Ghana. Schandorf is also the CEO of Golden Minds, a consortium that organizes Youth Entrepreneurship Summits, such as YES, aimed at building strong networks of young leaders, innovators, change makers, doers and entrepreneurs. Prior to Farmerline Ltd and Golden Minds, Schandorf worked at the Bank of Africa- Ghana.
Schandorf holds a BSc in Natural Resource Management from the Kwame Nkrumah University of Science and Technology. As a Students’ Leader, he served as Faculty President, a College and Faculty Board Member, and a SRC Parliamentary Member. These experiences have highly contributed to Schandorf's ability to lead and inspire.
From his humble upbringing, Schandorf has learned that no vision should have limitation. With a team of passionate young leaders and change makers, Schandorf has widely communicated this concept, inspiring over 10,000 senior high school and tertiary students through training workshops on career guidance, leadership and job creation.
As a columnist, Schandorf has also engaged, shaped and challenged thousands of readers. Popular topics including good governance, efficient use of natural resources in Africa, impact through social media and sexual health