There is a difference between acquiring luxury goods and actually being wealthy. Wealth is generational. Trying to look wealthy with luxurious purchases can actually put you into debt. Some of the wealthiest people on the planet do not wear their riches on them. Wealthy people are not concerned with looking rich. They are too wealthy to care. Wealthy people have no fear of being broke. Only rich people can become broke. When you are poor the only direction you can go is up.
You may ask yourself, “What is the difference between rich and wealthy?” For starters, wealthy people invest in revenue making assets only. Their goal is to make money while they are sleeping. They create jobs, start or buy new businesses that generate more money. Their goal is to create multiple income streams.
Several years ago, I read the book, “Rich Dad, Poor Dad.” It was a game changer for me. I later read another book, “What would Rockefeller do?” I have read a lot of books on wealth building, but these two in particular stood out to me. The authors spoke to me in a language I understood. Having your own business and purchasing real assets are the key to wealth building.
There are many ways you can start your own business. My favorite type of business is when the talent generates the revenue. This eliminates the need for a huge start-up capital. From that starting point, the revenue generated by your business can be used to invest in multiple revenue earning assets, such as property, land, and other businesses. You can also use your salary as a source of your investment. However, if you consume every penny you earn, you will never be rich or be able to generate wealth.
Here are some tips for those of you who are interested in building generational wealth:
- Develop wealthy habits such as low cost of living, savings, and investing.
- Invest in college funds or assets that can pay for your children’s education so that it does not drain your retirement fund.
- Ask wealthy people for advice. You do not know everything.
- Savings and investment go hand in hand. Invest in assets that will increase your net worth. For example, a car looses its value over time. A house or property in the right area increases in value. Investing in real estate is very important in wealth building. If you can’t afford to build the house, buy the land. God is not making anymore land!
- Avoid debt. The quicker you come out of debt, the better. However, don’t wait until you get rid of your debt to start investing. For example, if you have the opportunity to buy 5 acres of land for 20k, and your total credit card debt is 15k, buy the land. One day soon, one 1 arce of that land will be worth more than the principal and interest you will pay on the credit card. I will even take money from a zero interest credit card that I have 24 months to pay interest to buy land or property. That’s an interest free loan to buy an asset.
- You must protect your assets by creating a family Trust and a Will. All wealthy families have a family Trust.
- Capitalise on tax breaks and write-off expenses to reduce your actual income.
- Build a business or businesses to pass down to your children and grandchildren.
- Talk to your children about money savings and investing money from an early age.
Building general wealth or maintaining it requires strategic planning and discipline. The golden rule is to keep your debt at zero or low and only invest in assets that will make you more money and increase in value over time. Don’t forget to subscribe to our blog and follow me on Instagram
Cheers
Basia aka Legend Agent