How to Create Wealth
Jun 26, 2024Do you want to be wealthy? Do you know what that means for you?
There are 3 elements of creating wealth, and the KEY is to do them all in PARALLEL! Here they are:
- Clarity
- Diversification
- Consistency
This is what it looks like:
1. CLARITY
This relates to being clear on you want money to do for you. Do you want a bigger house? Do you want to live in the country or closer to the city? Do you want to have a big overseas holiday every year? Do you want to have the choice to retire early?
It's important to know what amount of money you need, as then you can better plan the things you need to do on a regular basis to reach the goal that you want.
2. DIVERSIFICATION
While this is an investing term, it essentially means that you need to be doing multiple things in parallel.
When it comes to money, we are taught to do one thing at a time - pay off debt, then save for a home, then buy a home, pay off your home, then start investing... This will NOT make you wealthy.
Even doing things on a micro level, consistently over a period of time, will make a huge difference. You don't have to do big things with a lot of money, and doing different things will make sure that you are covered for different phases of your life and investments.
For example, while you're in the phase of life that you are paying off a house (and perhaps other personal debt), you can pay that debt off while also contributing to your retirement fund (i.e. superannuation), and investing (even if it's only micro-investing). You could use the equity in your home to buy an investment property if the numbers stack up.
Having options with your money now, will give you more options later.
3. CONSISTENCY
This is the most important part - keep on going. Don't stop saving because you think it is too small an amount. Learn the basics of investing (even if it's buying Index Funds or Managed Funds) - enough to get started, and then slowly add to it over time.
Keep at your debt - focus on a smaller debt and pay that down. Or, you could focus on the debt with the highest interest rate and hammer that one.
Just keep on going.
