Monique Todd, Contributor
FOR MANY, the idea of building wealth can be a daunting task. Where does one start? How does one prioritise goals?
What is wealth?
First, if we are to determine how we are going to build wealth, we need to define it. Wealth is a very personal matter and it is important to evaluate what wealth means to you, personally.
Earlier, wealth was assumed to include only one's monetary assets, how much a person has invested or saved, or the value of the real estate held. Over time, the definition has changed. It has become more personalised.
Your definition of wealth will depend on your core values. Wealth can encompass both your tangible assets, such as your investments, and your intangible assets, which may include family relationships, time, positive memories. You need to be more concerned with building true wealth, which can encompass good health, family security, quality relationships and sustainable lifestyles.
Finding opportunities
Once you have evaluated and clearly defined your goals, what is it you want to achieve in life that will truly define you as a wealthy person. Then you focus on what are the opportunities to build wealth. The important thing here is acknowledging there are opportunities to succeed.
We all know of a person who took a simple idea and built this idea into an empire. What does it take to succeed in a global environment where physical borders are being blurred and competition is at every corner? Here are some key traits that you will need to succeed:
Eye for opportunity
This means establishing a need and quickly satisfying it. Have a passionate desire to do things better by constantly looking for ways to improve. Be creative, innovative and resourceful. This means identifying a chance to start or develop a business or a way to earn, something you may have previously overlooked.
In this day and age, where service industries thrive, having a vision and building on your existing skills will go a far way. You may be able to put your mechanical, cooking, business or decorating skills to use. You could build on an idea to invent a new product, or service. It does not have to be complicated or revolutionary.
Appetite for hard work: Recognising that you may need to start out working long, hard hours with little pay to prove yourself to those around you and selling your product/idea.
Self-confidence: Being innovative may mean that you are going to challenge the status quo, so you will hear the words 'it can't be done' quite a bit. Recognise when to readjust your path if the criticism is constructive and useful, and when to simply disregard the comments as pessimism.
Discipline: Resist the temptation to do what is unimportant or the easiest, but think through to what is the most essential.
Judgement: The ability to think quickly and make a wise decision.
Ability to accept change: As the saying goes, 'the only thing constant is change'. Change occurs frequently in today's global marketplace and it is important to take advantage of it and use it to grow.
The need to achieve: The drive towards personal success. Be highly self-motivated.
Achieve your goals
Succeeding is about having the right attitude and being resourceful and passionate about your goals. Don't worry if you do not have all of these traits. The important thing is recognising the shortfall and developing the necessary skills, through experience, and making a conscious effort to learn and change. Knowing what we want and the skills needed to achieve success, we can focus on building our assets. How we do this can be summarised in to two words - spend smart.
All those books and articles you see about squeezing everyday expenses to generate savings are right. Almost everyone, who has a job, can manage to save a little every day. Simply substituting a thermos of home-made lemonade for the $30 soft drink could save you $7,800 a year. A good start - some other things could you substitute - store-bought breakfast, lunch, coffee, etc.
Yes, the key to becoming wealthy is to spend less than you earn. But while the savings strategies work, they work best if you combine them with serious investing.
Invest well
Spending less is great, but spending less and investing well is even better. Invest in good, solid investments over a long period and let the power of time and compounding work for you.
There is no one road to building your assets, but you can put the odds of creating wealth on your side by following a few simple precepts.
Make your money work as hard as you do.
Make sure your money is working for you, instead of against you.
Remember, if you don't see it, you won't spend it! Make your monthly investments automatic.
Yes, the principles of building wealth are certainly simple, but in the world of money management, simple steps are often the most effective.
Monique Todd is director, wealth management and marketing, Scotia Group. Send feedback to: jobsmart@gleanerjm.com.
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