In all of human history, now is the most awesome time to pursue your financial dreams and aspirations. This is because building wealth and achieving financial freedom has never been this easy.
The knowledge of how wealth can be accumulated has never been this accessible. The information, strategies, and principles of wealth building can be more easily accessed in the public domain than ever before.
Doing a little study of what makes for wealth accumulation will establish the fact that there are three basic steps to it.
One fundamental truth every wealth seeker must know is that building wealth is not rocket science. It can be achieved by engaging these three basic steps.
Knowing and engaging these 3 steps will guarantee the acquisition of wealth any day, anytime, and anywhere on the planet earth.
This is essentially so because these are universally tested and proven money-making strategies that will surely grow your money over time. They will empower you to make, manage, and multiply your money.
Now let’s look at these three steps.
The Step 1
The number one step to wealth building is to generate enough income to meet your financial needs and also have some money to save for investment.
This is the first rung in the ladder of wealth building. This is the place to begin your wealth-building journey.
When it comes to earning or generating income, basically, there are two main ways to do it. You can either earn passive income or earned income. Earned income is essentially linear in nature, that is, you are paid once for every work you do. While passive income, otherwise known as residual income positions you to get paid many times over for every work you do.
The number one step to wealth building is to position yourself to earn as much income as possible. The more money you earn the higher the probability of having some money to save for investment after your living needs and financial obligations are met.
Understanding Your Earning Ability
This would be made possible by becoming very good at what you do. The amount of income you are earning today is a direct reflection of the extent to which you have developed your earning ability. This makes understanding the importance of your earning ability and how to enhance it a very fundamental factor in your pursuit of financial freedom.
In their bid to encourage you to invest, many investment coaches and teachers will tout and flaunt earnings from their investing acumen. They will do everything possible to sell you the importance of investing a part of your earnings.
Unfortunately, what these experts fail to teach is how you get money in the first place invest. This makes your ability to earn an income the place to start your journey to wealth accumulation and financial freedom.
I want to believe you already possess at least a skill that can add value to others or solve their problems in exchange for their money. But in case you do not have a commercially valuable skill, you need as a matter of urgency to go acquire a skill right now. You must be skilled in your chosen field of endeavor. This is your earning ability, and it is what defines your value in the marketplace. It is of great importance in your quest for wealth accumulation.
Your earning ability is all you really have to trade for everything you want in the marketplace. Your earning ability is the ability to provide services and products that add value or solve problems for your clients or the company you work for. It is all about your ability to work using your knowledge, expertise, skills, experiences, and talents to earn money.
It, therefore, means acquiring a skill that can solve problems for people in exchange for their money is your most logical take-off point in the pursuit of financial freedom. It determines what you take home and your ultimate lifestyle and standard of living. This makes giving serious attention to your ability to earn an income a non-negotiable issue.
The master key to improving your income is therefore to enhance your earning ability. As you become better, more productive, effective, efficient, and excellent in whatever you do, you‘re simply increasing your earning ability.
And this has a great tendency to impact positively upon whatever you‘re earning financially. One very important attribute of the market is that it rewards excellence. Excellent products and services receive excellent rewards in the marketplace, while average and mediocre products and services receive average and mediocre rewards accordingly.
The Step 2
The second step is to manage your spending so that you can maximize your income and have some money to save. Earning a lot of money does not equal wealth; neither does it translate to being wealthy, especially if you are spending all you earn.
If you are simply focusing on the income side of the equation of wealth building while neglecting the expense side, then, your chances of ever becoming wealthy are very slim. This can spell financial doom for you.
“If you would be wealthy, think, saving as well as getting.”- Benjamin Franklin
“If you cannot save money, then the seeds of greatness are not in you.”–Clement W. Stone
Please understand that there is an enormous difference between earning a great deal of money and being financially free or wealthy. Wealth is not the same as income. If you earn a good income and spend it all, you are not getting wealthier. You are just living large. Wealth is what you accumulate, not what you spend.
“Do not save what is left after spending, but spend what is left after saving.” -Warren Buffett
“There is treasure to be desired and oil in the dwelling of the wise; but a foolish man spendeth it up,” Proverbs 21:20
Now, here are some steps you can take to facilitate your quest to save some of your earnings:
1. Track your spending: In order to effectively position yourself to save some money, it is important to first learn to track your spending for about a month. This can easily be done with the aid of financial software. All you will need to do is to record all your expenditures no matter how small for about a month. This will allow you to discover where your money goes and where you will need to make amends.
2. Set A Savings Goal One of the best ways to save money is to set it as a goal. Saving with a purpose in mind can be inspiring and motivating. Saving money must be intentional. I believe one major goal that can inspire you to save is the goal to live in financial freedom. Therefore, arm yourself with a goal that means much to you as you take steps to save a part of your earnings.
3. Put Saving Money On Automatic: Perhaps the easiest way to save money is to arrange with your bank to have a set amount of money transferred from your checking account to a savings or investment account. The amount should not be less than ten percent of your income.
This takes emotion and the tendency to want to analyze your financial situation to see whether it’s convenient to save.
It might interest you to know that the rich save first and then spend what is left; while the poor spend first, then save out of what is left.
4. Make Saving Money A Habit Saving money should not be an exercise you engage in once in a while, especially when you think it is convenient to do so, but it should be your habit.
Saving money is a matter of habit for the wealthy. Every wealthy person has the habit of saving a part of their earnings; saving money is their lifestyle
The Step 3
The third step is to invest your money in a variety of different assets so that it’s properly diversified for the long haul.
This makes saving money essentially a means to an end. It is essentially to reduce expenditures in order to have some funds to invest in income-generating assets.
“If we never save money or invest, we will always be poor, no matter how much we earn.”- Anonymous
Investing is essentially your money working to earn money for you. This can be done through the money market of the capital market.
The money market is a short-term lending system. Borrowers use it to access funds they need to operate from day to day and for no longer than a year, while lenders use it to put cash to work.
The capital market is geared toward long-term investing. Companies issue stocks and bonds to raise money to grow their business. Investors buy them to share in that growth. The money market is less risky than the capital market while the capital market is potentially more rewarding.
Please note, it’s very important for you to always investigate before you invest your hard-earned money. Invest in what you understand and don’t you ever forget to do your due diligence.
In conclusion, the ESI (earn, save, and invest) Strategy is your sure access to wealth and financial freedom. So get started with implementing this awesome strategy for a change of financial story and status.
To Your Prosperity
Sharon Akinoluwa
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