We all dream of great riches and wealth, but we’re not always sure how to achieve this. Contrary to popular belief, wealth does not have to be confined to the privileged few. Of course there will always be work involved, but once you have a system in place then it becomes easier, automatic even.
There are 3 really simple things you can do to become financially free. Of course this means different things for different people – for Bill Gates, who is already wealthy, becoming wealthier takes on a whole new meaning when compared to someone who lives in a shack. But the person in the shack can use exactly the same principles to become wealthy. All it takes, like most things in life, is effort over time.
This is the 3-step plan to building wealth – save, invest, speculate.
First, savings. This is a habit, and anybody can do it. People often save for a holiday, a new car, a new dress. But what about saving for the sake of saving? The word interest, a Greek derivative of the word for offspring, was actually coined (pardon the pun) to refer to your money making babies for you, not the bank. Even though interest rates for savings can be low, with a good savings plan you can get as much as a 10% return, which is above inflation.
Second, investment. When you have enough money saved, then the next step is to invest it, probably in a slightly more sophisticated financial system than an ordinary savings account. Sanlam, Liberty, Old Mutual can all help you, as can a whole bunch of brokers and financial consultants. First word of caution: go for a tried, tested and trusted company rather than an unknown. The last thing you want to do is lose your money to a scam.
And this leads to three, speculation. This involves the ‘greater risk, greater reward’ principle: more volatile options usually lead to greater returns. However, second and most important word of caution: the wealthiest people will all tell you that they took calculated risks, not foolhardy ones. Also, never put more than 10% of your savings/investment in the hands of one company or person – spread those eggs around in many baskets.
Remember, patience builds wealth, while the ‘get-rich-quick’ mentality destroys it. Build slowly and solidly, and over time you too can be wealthy.