It is not a magic for one to become rich, everyone has the ability to be rich and one is poor only if he/she chooses to be. The following steps can help guide you on the path to Wealth.
1: Change the Way You Think About Money
The general population has a love / hate relationship with wealth. They resent those who have it, but spend their entire lives attempting to get it for themselves. The reason a vast majority of people never accumulate a substantial nest egg is because they don’t understand the nature of money or how it works.
Cash, like a person, is a living thing. When you wake up in the morning and go to work, you are selling a product – yourself (or more specifically, your labor).
When you realize that every morning your assets wake up and have the same potential to work as you do, you unlock a powerful key in your life. Each dollar you save is like an employee. Over the course of time, the goal is to make your employees work hard, and eventually, they will make enough money to hire more workers (cash). When you have become truly successful, you no longer have to sell your own labor, but can live off of the labor of your assets.
2: Develop an Understanding of the Power of Small Amounts.
The biggest mistake most people make is that they think they have to start with an entire Napoleon-like army. They suffer from the “not enough” mentality; namely that if they aren’t making N100,000 or N500,000 investments at a time, they will never become rich. What these people don’t realize is that entire armies are built one soldier at a time; so too is their financial arsenal.
A friend of mine once knew a woman who worked as a dishwasher and made her purses out of used liquid detergent bottles.
This woman invested and saved everything she had despite it never being more than a few dollars at a time. Now, her portfolio is worth millions upon millions of money, all of which was built upon small investments. I am not suggesting you become this frugal, but the lesson is still a valuable one.
Do not despise the day of small beginnings!
3: With Each Dollar You Save, You Are Buying Yourself Freedom
When you put it in these terms, you see how spending N20 here and N40 there can make a huge difference in the long run. Since money has the ability to work in your place, the more of it you employ, the faster and larger it will grow. Along with more money comes more freedom – the freedom to stay home with your kids, the freedom to retire and travel around the world, or the freedom to quit your job. If you have any source of income, it is possible for you to start building wealth today. It may only be N5 or N10 at a time, but each of those investments is a stone in the foundation of your financial freedom.
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4: You Are Responsible for Where You Are in Your Life
Years ago, a friend told me she didn’t want to invest in stocks because she “didn’t want to wait ten years to be rich…” she would rather enjoy her money now. The folly with this school of thinking is that the odds are, you are going to be alive in ten years. The question is whether or not you will be better off when you arrive there. Where you are right now is the sum total of the decisions you have made in the past. Why not set the stage for your life in the future right now?
5: Instead of Buying the Product… Buy the Stock!
Someone once asked me why they weren’t wealthy. They always felt like they were putting money aside, yet never seemed to get any further ahead. The answer is simple. I told them to stop buying the products companies sell and start buying the company itself! A survey of America’s affluent (those who make over $225,000 a year or own $3,000,000 in assets) revealed that 27-30% of all the income the wealthy earned went into investments and savings. That isn’t a result of being rich, that is why they are rich. When the pain of getting out of the bondage of financial slavery is greater than the pain of changing your spending habits, you will become rich. Either change, or be content to live as you are.
6: Study and Admire Success and Those Who Have Achieved It… Then Emulate It..!
A very wise investor once said to pick the traits you admire and dislike the most about your heroes, then do everything in your power to develop the traits you like and reject the ones you don’t. Mold yourself into who you want to become. You’ll find that by investing in yourself first, money will begin to flow into your life. Success and wealth beget success and wealth. You have to purchase your way into that cycle, and you do so by building your army one soldier at a time and putting your money to work for you.
7: Realize that More Money is Not the Answer.
More money is not going to solve your problem. Money is a magnifying glass; it will accelerate and bring to light your true habits. If you are not capable of handling a job paying N1800,000 a year, the worst possible thing that could happen to you is for you to earn six figures. It would destroy you. I have met too many people earning N10,000000 a year who are living from paycheck to paycheck and don’t understand why it is happening. The problem isn’t the size of their checkbook, it is the way in which they were taught to use money.
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8: Unless Your Parents Were Wealthy, Don’t Do What They Did.
The definition of insanity is doing the same thing over and over again and expecting a different result. If your parents were not living the life you want to live then don’t do what they did! You must break away from the mentality of past generations if you want to have a different lifestyle than they had.
To achieve the financial freedom and success that your family may or may not have had, you have to do two things.
First, make a firm commitment to get out of debt. To find out which debts should be paid off before you invest and those that are acceptable, read Pay Off Your Debt or Invest?. Second, make saving and investing the highest financial priority in your life; one technique is to pay yourself first.
Purchasing equity is vital to your financial success as an individual whether you are in need of cash income or desire long-term appreciation in stock value. Nowhere else can your money do as much for you as when you use it to invest in a business that has wonderful long-term prospects
9: Do not Worry.
The miracle of life is that it doesn’t matter so much where you are, it matters where you are going. Once you have made the choice to take control back of your life by building up your net worth, don’t give a second thought to the “what ifs”. Every moment that goes by, you are growing closer and closer to your ultimate goal – control and freedom.
Every Naira that passes through your hands is a seed to your financial future.
Rest assured, if you are diligent and responsible, financial prosperity is an inevitability. The day will come when you make your last payment on your car, your house, or whatever else it is you owe. There is always hope for everyone. You will surely make it if you are determined. Until then, enjoy the process.