• Sunday, July 21, 2024
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BusinessDay

New Year: Building the foundation for wealth creation

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Many people had plans to make wealth last year but could not because they were unable to get their strategy right. Not because they did not earn income, but because the funds were wrongly directed to things that will not make it grow.

Looking into the future therefore, there are basic principles to wealth creation and the first and most important is getting the savings habit right.

Experts say, wealth creation is not about how much you earn but how well you utilise what you earn. This is why you find people on the same salary or income level attaining different levels of financial freedom and comfort.

If you are reading this now, then take these posers and also provide answers by accessing yourself with another person around you (colleague in the same salary level) or other people around you.

Why is it that some people can earn very little money, but always seem to be able to take care of all their financial needs and live comfortably?

Again, why do other people who earn a lot appear to always be in debt and struggling to make ends meet?

Ordinarily, one would have expected that if you earn a lot of money, you should be financially stable. And if you earn very little, you should always be in debt and struggling financially.

So, why is this not what we see with the people we live with and hear about?

“This is why analysts say wealth creation is a skill that must be learnt for one to achieve a satisfactory level in financial upliftment irrespective of your income level”.

Old Mutual analysts in one of her money education series “Understanding the Relationship Between Earning Ability and Wealth Creation” explains… “The truth is that there is no connection between what you earn and how well you manage your money.

“That is good news for everyone. It means that despite our earning levels, we can all learn good money management habits and we can all aspire to a good level of financial security.”

Indeed, we can do more than just aspire, we can actually do something to achieve that financial security during our lifetimes, the analysts said.

If your question is how is it possible to become financially successful or create wealth with low income, this message is for you.

If a higher income earner can afford to save N50,000 monthly from his big salary, start now to save N5,000 from what you earn. When you are able to make this savings for some time, say for two years, you have pulled together an investible fund that would enable you enter the stock market as an investor in money market funds.

Over time, these investments would begin to grow and yield returns that can elevate your financial status and create the needed financial comfort.

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