When my father came back from the war, he got a job for about $4 a week. (in those days it was quite good pay). He put $1 a week into an insurance policy for us three kids just in case something went wrong. It did go wrong. And when we turned eighteen years old, we got the payout. $1800 each. Do the math. My Dad put 30% of his income into an investment that paid me less than 3% of my salary. It really didn’t add up. But my Dad wasn’t creating wealth, he was working to make his family safe, just in case.
Wealth creation is another topic.
Wealthy people Invest as if they are billionaires and spend as if they were poor. Poor people invest like they are poor and spend like they are billionaires.
Lifestyle is not wealth creation. Wealth creation is the amount of money you have invested in compounding interest investments. Your income from work helps fund your investments.
Structure is the key to wealth creation. This includes tax structures, and, most importantly, investing over and over again in your proven model of success. For example: my client buys and sells property that can be sub-divided. They never invest in any other type of property and therefore they are rarely involved in investments they have no experience/momentum in.
- A good salary is not the solution to wealth creation.
- Income is the feeder of cash into wealth creation.
- Do be mindful of investing in schemes that are new to you – better to stick to what you know
- Dabble with “losable money” in new schemes … but like a casino, don’t invest money you can’t afford to lose in new schemes.
- Compound interest is the key to wealth as long as you can leverage your investment (mortgage) and earn compound interest on a larger sum.
- Beware of anything that sounds too good to be true. it usually is.