Far too many of us believe that wealth and a full bank account is unattainable. A privilege only the minority can enjoy. But that’s simply not true. Everyone has the ability to accumulate wealth but not everyone has the understanding to do so. You need some smarts to be to able to make the amount of money your heart desires. What’s more, the goalposts are always moving because the economy is constantly fluctuating.
At the beginning of this year, South Africa was sinking deep into another recession. Recently, it was announced that this is no longer the case. However, that doesn’t mean it’s easier to live in this country. The cost of living is actually far too high for most of our various incomes and this means that very few people consider themselves wealthy. So, while it is difficult to become wealthy it’s still not impossible and definitely something you should strive for.
There’s a saying that you should always pay yourself first before paying anyone else. And while this is ideal, not everyone can afford a savings account. But if you can’t save, it’s likely because you’ve mismanaged your money in the past and your debts are bad and your lifestyle doesn’t match your paycheck. The list of reasons for a lack of savings are endless but you can fix it. And with some patience, discipline and tenacity you’ll be sitting flush with cash and a growing savings account in no time.
The most simple tip is to spend less than you earn
Life doesn’t always play ball on this one but if you can manage to spend less than you earn you will be able to get richer each month. You should save some money each month. You must ensure that, even in the difficult months, a small fraction of your expendable income must be put towards your rainy day account. You’ll thank yourself in the long run because future “difficult months” can now be handled easily.
Debt is debt, good or bad
Most people think that debt is just a part of normal life and that everyone is struggling with the same problem. In reality, debt is bad. Yes you need to accrue some debt to create a credit history and yes you’ll probably need to finance your car and get a bond on your property, that’s part of life. But any debt outside of this is actually unacceptable if you’re trying to garner wealth. And you need to be clever about how you create this debt. For instance, if you move to or live in a major city like Johannesburg you will need a car. It is dangerous to not have one. But you mustn’t finance a new car and hope to create wealth. This is silly debt. You want to find dealerships who specialise in used cars in the Gauteng area and find the best buy for the least amount of money. If you can finance a car like this and pay it off in three years or less you’ll have gained.
And similar principles apply with purchasing a property. You want to purchase the worst property in the best area so you’re assured of a return on investment when and if you decide to sell. You can throw some money into the property over a couple of years so that you create more opportunity for profits when you sell. Ultimately, unless getting into debt is going to make you money eventually, don’t do it.
If you’re wearing your wealth you’re doing it wrong
You’ll often find that the wealthiest people don’t wear their wealth in the form of designer clothing, watches and luxury cars. And don’t consider celebrities here, they’re required to dress in the best and drive the fanciest because they are in the public eye all the time. The reality is that spending your money on these things will not help you in the long run.
All of your investable money you should pump into a portfolio of investments that’ll offer you rewards. Of course, spoiling yourself every now and then is fine. Treating yourself when you need a new watch or setting your home up for comfort or even travelling all over the world, these are all things that you can enjoy when you’re wealthy. But investments first, assets first and future wealth should be a priority.
Of course, don’t put yourself or your loved ones in danger. But if you have some money to play with – and with knowledge and guidance – take a couple of risks with investments. Because essentially unless you have a special talent to exploit or create a business out of, or unless you marry rich, win the lottery or inherit a bunch of cash, there’s no other way to make cash other than taking a measured gamble.