What makes the difference between those who are suffering financially and those who enjoy financial freedom? The ability to not just pay the bills, but to have constant cashflow from investments, whether they are working or not? Let’s find out in the lines below.
# Imagine Having Studied Wealth Creation As A Subject In School
#No Better Time To Start Than The Present
#How To Create Wealth, No Matter What You Do; A Simple Formular
#Start From Right Where You Are
Imagine; if with all those years we spent at school, from nursery class up to university (and for some of us, even postgraduate levels); imagine we had been taught and drilled by our teachers, alongside maths, furthermaths, litterature, biology; alongside the spankings when we made mistakes; imagine we had been drilled consistently through all those years on how to CREATE WEALTH and we had also been required to begin to practice from age 6-7 and above; how much wealth would we have accumulated by now? Almost anyone who has acquired an undergraduate degree has been at school for a minimum of seventeen years (that is, if we didn’t repeat a class). What if we had been encouraged to start creating wealth with a portion of our pocket money; and we had done this faithfully for twelve years. To show you the power of compounding, imagine a boy named Michael had been told to practice by putting aside twenty percent of his lunch money as savings; with another 10% as emergency funds for twelve years, and the money had been growing in an investment portfolio on compound interest with a bank; Michael had to eat a much smaller lunch than his classmates, and close his eyes to some treats sometimes, just so he could continue saving that 30% consistently. Sometimes, he was really tempted to stop; after all, everyone else was spending all their money and enjoying themselves without denying themselves anything. But his mum always told him; “live like no one else today, so that tomorrow, you can do what no one else can.” And then say he graduated at 21, and then continued to do the same thing with his salary from his first job, or profit from his first business; I think we would all agree that by 31 years of age, if not before, Micheal would have become a millionaire, with the financial capacity to invest in properties and businesses with the potential to bring heavy returns and cashflow.
It is very important to point out, at this point, that the whole point of this scenario we just described is not to create regrets or wishful thinking about what we should have done or not done in the past; that would simply be a waste of time, and that is not at all our focus here. It is simply to show that creating wealth is not about being the most intelligent or luckiest person; it’s simply a process, that if followed, will bring results to whoever is following the process. And secondly, the earlier you start out on the process of creating wealth, the better. And trust me, there’s no better time to start out than the present (that is, if you haven’t started already). Starting today is definitely better than starting next year, or starting in the next three years. In creating wealth, time is one of your best friends, and someone who gets a headstart now will be better off in the next five years than someone who decides to start then.
The formula; you see, wealth creation is really a formula; when certain principles are practiced or put to play, then there is an output; the resultant effects of what was imputed, or put to play. No matter where you are, or what you do, you can build wealth if you apply the formula.
The first step is to have a source of income; it’s really not possible to build wealth without having a source of income; whether that source is from a job, or from a business. I overlooked this simple but indispensable factor for a couple of years in my twenties and that set me back some years in my wealth creation journey. Next, you have to commit to put aside AT LEAST 10 percent of your income; this portion should be “untouchable”; and should stay that way. When we say at least 10 percent of your income, it means that no matter your situation, 10 percent should be the starting minimum if you ever want to reach financial freedom. Of course, there are people who can afford to put aside fifty percent or more of their incomes; but everybody’s situation differs; some people’s incomes can cover all their living expenses and throw off some excess or disposable income; other people’s incomes just barely cover their living expenses; while other people’s income do not even cover their living expenses. But no matter your situation, consider this “untouchable” part of your income as your “financial freedom fund”; as the money you need to buy your financial freedom because without you putting this aside faithfully, you’ll just end up going around the same circle endlessly; go to work (in this sense, work includes even business), earn an income; pay the bills; nothing left over; go back to work. It’s called the RAT RACE and it never ends – living from paycheck to paycheck until the individual retires due to age, health issues, or being laid off from work with little or no savings, a meagre pension, and then relies on family, welfare or the unreliable government, or a combination of all three and simply becomes a number in the statistics; the 80 percent of people who retire poor.
Make up your mind that this will NEVER happen to you; you’ll never simply be one of the numbers that statistics talks about; decide that your path will be different; that you’ll have choices in this life, whether to continue working at a particular job or not, and even the choice to change career or business paths if you find out that’s not what you want to spend the rest of your life doing, and that it doesn’t bring you fulfillment. But freedom of choice in the real world means that you have the cash to back up your decisions and pay the bills while doing or switching to what you choose. But it all begins with putting aside that particular portion of your income consistently; except of course you’re looking at winning the lottery; and we all know the odds of that. Remember, 10% is our starting minimum, but if you can put aside more, even better; and the faster you’ll reach financial freedom. Now after having put aside this portion consistently for a while, and it has grown into a nice round sum, then you can put it into an investment that will provide returns to increase the value of your portfolio. It’s very important to point out here that before you put your money into any investment, you would have taken time to research such an investment. Let’s say you started saving 20% of your income every month in May 2017, and by December 2018, your fund had gotten to N500,000. Now before you invest this anywhere, it would be wise and expected that right from the first day you started putting aside that portion in May 2017, you had also started researching investment opportunities, and over the months or years, would have come to understand almost everything about a particular type of investment or business before putting your precious cash into it. This is especially important because many fresh entrepreneurs and investors have mistakenly thrown their hard earned cash to the dogs. It happened to me when I first started a new business; and it happened to my husband when he decided to switch businesses, and countless others that I know. Don’t be like us that had to learn the hard and painful way; do your due diligence over a certain period of time before you commit your money into anything. And don’t let anyone deceive you into believing that an investment or business opportunity will soon disappear if you don’t hurry; better to let it go than to lose your money.
That being said, after having done your first investment, you can now begin to either add to it, or begin to gather another nice round sum to put into another investment after it has grown sufficiently. Now all you have to do is rinse and repeat this process over and over again, until the profits from your investments can cover your living expenses. Also, make sure you discipline yourself to avoid touching either the funds from your investments, or the profits from them, so that your wealth can grow and compound faster. After all, before you started putting aside a set amount or percentage of your income each month, all you had was your primary income or salary. So why dip into your investments just yet? Trust me, a time will come to spoil yourself a little; just be patient, and give your investments the time to really do what they can do best; grow and increase and compound and multiply overtime. Remember, what separates those that create wealth from those that don’t is the key character trait or discipline called delayed gratification. It simply means the ability to sacrifice and give up some pleasures today, in order to enjoy even better privileges tomorrow. There is an old saying which says; Pay now and play later, or play now and pay later; either way, you’ve got to pay. You’re in charge here; you’re completely free to choose, and you have entirely the power of choice; but remember, you can’t have both; it’s either one or the other.
Now, I have to point out here, that in no way am I saying or suggesting that you should cut off every single little luxury or your entire creature comforts; what I’m saying is that you need to really, really put things in perspective and have not only a short term view of things, but a long term view as well, for the sake of the future. The Word says; All things are lawful unto me but all things are not expedient unto me; all things are lawful unto me, but I will not be brought under the power of any. So by all means, go ahead and enjoy your little luxuries and creature comforts here and there, that alleviate the daily stress of work and responsibilities; but at the same time, don’t indulge in them to the detriment of the future; make it a daily habit to evaluate and limit those expenses where you need to. For example, do you really need to go to the cinema to watch movies every single week when you can buy a DVD and enjoy the movies on your flat screen at home? And save much more in the process? Of course, you’re not banned from cinemas, but going there once in a while as an occasional treat is far more economical and wiser than going there all the time. Don’t sacrifice the future for today; your future self will thank you.
Someone might be asking; “where do I start from?” My income is so low; I’m in debt; I’m not even able to keep up with my bills, talk less of having anything extra to put aside at the end of the day. You want to know the bitter truth which is a hard pill to swallow? You have to Start from right where you are. All your complaints might be true, about having little or next to nothing extra at the end of the month, but if you don’t begin to put aside some amount, no matter how little each month, or each time you get an income, then you may just keep going round in circles for the rest of your working life. Earn; spend it all; continue earning; and continue spending it all. That’s what results in some people who, having worked for fifteen, twenty years, have nothing to show for it. They have placed themselves in a position to NEVER be financially free; in a position where they have little or no options. Even if you can only start with 5%, then go ahead and start saving it consistently. And if you sincerely can’t save anything from your income, then get an extra source of income. You might consider working a part-time job or better still, starting a business on the side. Then begin to save all your income from your second income each month. Take charge of your financial life; don’t just let life passively happen to you, and then wake up one day and realize that you’ve got nothing to fall back on. I once met an aging lawyer in private practice somewhere around his late fifties or early sixties; I sold him the idea of starting up a private pension plan for himself, for his retirement. He simply told me; “I will work till I die.” Now I don’t know if he really believes that; if he really believes that by the time he’s eighty-five or ninety, without any investments that can throw off cashflow for his upkeep and living expenses, that he’ll still continue to work full time at a pace that will enable him earn the level of income that will support his expenses and the cost of health care. That’s really closing your eyes to the truth isn’t it? Of course, one can work at eighty-five, but it will never be at full capacity, like a man of fourty-five would. How would someone at that age compete successfully with competitors in his industry who are forty or more years younger than him? Work at that stage would most likely be a part time kind of affair; to keep one’s self busy, and active for as long as possible, and with the effort to maintain or continue what one has already established; with a significant part of the work being delegated to younger hands. If at that age, someone is willfully convincing himself that he’ll be living from hand to mouth; going to work purely to earn an income and use that income to take care of himself, as he has been doing for most of his working life, then that’s a really strange perspective, and more like self delusion. And that’s why you must start now; from where you are NOW; whether it’s good or bad; comfortable or not; so that you can CHOOSE to retire when you want; and even if you choose to work for the rest of your life, you can do it at your own pace; not out of desperation, or due to the fact that you have no other choice. It is better to choose the hard path from a place of abundance, than to have to go through the hard path because you have no choice. The future is in your hands; you alone have the power to start building it with God’s help. START NOW.