Is it really possible to indulge in the fantasy of lounging on the couch or basking in a beach vacation while money effortlessly pours in? Can you transform yourself from rags to riches, multiplying your net worth tenfold?
One captivating tale that exemplifies this possibility is the story of Themba Gorimbo, who recently defied all odds and emerged victorious at UFC Vegas 73, despite having a mere $7 in his bank account. Not only did he achieve victory, but his incredible journey even caught the attention of Dwayne “The Rock” Johnson, who acknowledged him on Twitter. Gorimbo’s story quickly became a headline, with many citing it as evidence of the extraordinary potential to generate wealth from nothing. But how can you elevate your net worth from zero to having multiple zeroes?
While determination, resilience, mindset, strategy, and unwavering self-belief are often cited as the driving forces behind transforming meagre resources into abundant success, they do not tell the whole story. Many individuals possess these qualities yet still find themselves living paycheck to paycheck.
However, there are simple steps you can take to build significant wealth, even with limited funds, gradually. It’s crucial to remember that everyone has to start somewhere — even those who inherited substantial sums of money had family members who built wealth along the way. Instead of comparing yourself to others and feeling behind, focus on what you can control: your financial situation.
Once you embark on this journey, you might discover that it is not as daunting as anticipated, and building wealth can be an empowering endeavor. Here are some strategies to help you begin.
Four Key Strategies for Creating Wealth
Let’s look at four strategies to build wealth.
Change your mindset about money.
Are you among the people who believe money is the root of all evil, or are you from the school of thought that money is not everything but makes a difference?
Well, creating wealth begins with how you think about money. Once you think positively about money, then it becomes easier to make progress in making money.
Once you condition your mind to see money as a solution to problems rather than the problem itself, you can quickly transform your thoughts into action.
It’s agreeable that most super-wealthy people are self-made, and this number keeps increasing. But if you look at the lifestyle of the super-rich, you notice one common denominator, they are compounding their wealth with each day. In essence, they are committed to keep multiplying their wealth.
Changing your mindset is enough to engineer the transformation you need. And it follows the following path:
Become financially literate
According to the self-made millionaire and author Robert Kiyosaki, you can build wealth from nothing and flourish, but you must invest your time in financial education. He says financial literacy is the first tool you need to make your financial ark.
You’ll have to know about your income, expenses, interest, compounding, net worth, return on investment, passive income, financial independence, etc.
You don’t have to enroll in a class for this. In the modern era of democratized information, you can improve your financial literacy by:
- Reading eBooks, blogs and conventional books.
- Listening to podcasts and interviews
- Taking financial literacy course
- Attending financial literacy talks and seminars
And since learning is a continuous process, never stop learning. Follow reputable blogs providing honest info, keep tabs on successful investors and business people, and seek counsel. You can do this by following them on social media platforms.
Develop a Financial Plan
Nothing truly materialises without proper planning. Therefore, establishing a financial plan is crucial for paving the way to success. This plan serves as your personalised roadmap, allowing you to identify and leverage your strengths while acknowledging your weaknesses. Doing so can effectively curb unnecessary expenses and ensure your financial security becomes a priority. Merely relying on a salary increase or other external factors will not guarantee your economic well-being. You can actively shape your future and attain the desired success through mindful attention to your financial plan and goals.
A financial plan is a document outlining a person’s present financial situation and their short- and long-term monetary objectives, typically created independently or with the assistance of a certified financial planner. It encompasses strategies to achieve these goals, including managing life’s risks, income and spending, and reducing debt.
A financial plan ensures you are adequately prepared to meet your financial obligations and aspirations. Moreover, it enables them to monitor their progress over time, providing valuable guidance towards achieving economic well-being. Financial planning entails thoroughly assessing income, expenditure, debt, savings, and future expectations.
Develop a Stable Income Stream
To build wealth from scratch, you need to adopt the culture of saving, but that’s only possible if you have an income stream. You first earn, then save!
According to Warren Buffet, one of the wealthiest people globally, “If you don’t find a way to make money while you sleep, you will work until you die.“
Buffet, famously known as the Oracle of Omaha, simply means you must have multiple passive incomes flows if you ever want to gain financial independence.
When it comes to earning while asleep, passive income is king. But what’s a passive income?
Passive income refers to income generated without continuous effort or labour. Some ideas include selling digital products, blogging, affiliate marketing, and dropshipping. These methods offer opportunities to generate revenue outside of traditional employment. Additionally, embracing passive investing is crucial for long-term wealth growth.
Savings accounts are not considered investments, as they earn low-interest rates and can be impacted by inflation. Timing the market is not advisable, as long-term investing consistently yields better results.
Passive investing, where the bulk of your savings is allocated to passively managed funds, is becoming increasingly popular. Recognising the benefits of passive income and investing can pave the way for sustainable wealth accumulation.
But to achieve that goal, you gradually start stabilising your current income by adding multiple flows. Don’t stop what you are already doing to earn money, even if it’s just a meagre amount, but get another way to make some more money, and this process should be continuous.
Multiple income streams, including passive and active sources, contribute to wealth and financial stability. They encompass work income, business income, interest, dividends, rental income, capital gains, and licensing or royalty income. Diversifying income streams mitigates the impact of disruptions in any single source, fostering resilience and long-term prosperity.
To establish a sustainable wealth-building approach, consider making it a standard practice that each coin you earn should generate additional income before you spend it. This principle emphasises the creation of long-term value as the foundation of prosperity. By focusing on generating revenue through valuable offerings and continuously building on that foundation, you pave the way for sustainable wealth accumulation.
So, if you already have a job, keep your job but get another source of income. And if you own a small business, continue with your business, but find out how to create more long-term value. In manufacturing, it’s about producing more and better products faster at a cheaper rate and in an easier way than your competition.
Save First Before You Spend
If you have Robert Kiyosaki’s book, “Rich Dad, Poor Dad,” then you know he insists that when you earn a dollar, the first person you pay is you. This money can go into your savings account, retirement plan, investment, or insurance. The idea is to increase your net worth periodically.
The best way to prioritise your payment each month is to automate this payment, just like an expense. But most people don’t do this since they prioritise liabilities. By doing this, they end up with the leftover, which is just enough to sustain them till another paycheck.
Saving doesn’t only mean putting aside money for investments; it also means having a small kitty as an emergency fund. It is your self-funded insurance for unexpected expenses. And when it comes to investing your funds, TradingGuide.co.uk offers a variety of options, with dozens of guides on the same.
Other than compounding your savings or investment each month, saving a small amount each month, saving first before you spend, is a good habit because it puts pressure on you to stop getting comfortable with your income. When you pay yourself first in terms of savings or any of the suggested options and your finances fall short to cater for the liabilities, you are left with no choice but to look for an alternative income.
Closing Remark
Building wealth from nothing is possible, but it starts with changing your perception of money and respecting every coin that comes your way. Saving and investing are crucial pillars of this journey, with experts recommending saving at least 20% of your income.
You should also be able to earn additional income from side hustles; it’s time to combine these efforts and begin serious investing. Successful millionaires have amassed their fortunes through wise stock market investments.
If you don’t make money working for you, you’ll have to work harder instead. Investing allows your money to work on your behalf, profiting from the efforts of others. Embracing this approach is essential for long-term wealth accumulation.
Author bio: Thadeus Geodfrey
Thadeus is a trading guru, brilliant writer, and financial fanatic with years of expertise in the industry. Get ready to learn from his wealth of knowledge.
Mail which I use for Gravatar is: kittykathkit@gmail.com
