There is no one on this earth who does not want to enjoy financial freedom. The mainstay of virtually everyone’s endeavours is to make a decent living. Amassing wealth is indeed a noble undertaking especially when we are talking about generational wealth. Sadly, I have realized that so many people believe that being wealthy is the reserve of only a select few. Another misconception is that you have to do uncanny things or corrupt activities to be wealthy. There are honest and dignified principles that can lead to wealth creation.
The truth is that the principles that govern the creation of wealth are an open secret. Anyone can acquaint themselves with the principles, take them to heart and apply them. It does not matter which part of the world you are from if you practise them you will become wealthy. There is a lot we can talk about when it comes to wealth creation but I am going to compress all that into just 3 all-encompassing principles. Every notable millionaire or billionaire you know out there has applied and still is applying these 3 principles that shall be discussed herein.
Having Multiple Passive Income Streams
Do not rely on just one source of income; the risk factor involved in doing that is quite big. If ever anything happens and that source of income runs dry you are left in dire straits. That is the reason why you see established wealthy people having multiple income streams. Having such a framework provides you with fall back options if one or more income streams encounter hurdles. It is a safety net for your financial well-being. Most people solely depend on their salaries as an income stream but that is imprudent. Consider our local scenario right now where salaries have mainly failed to keep up with the ever-increasing and elusive hyperinflation.
If you are to set yourself on course to be wealthy then you must explore ways in which you can earn more other than just the salary. Notice that I also said ‘passive’; I had to include that to enunciate a very important point. Passive income is money that you make without directly doing anything. For example, let us suppose you start a taxi cab business with 4 light vehicles. You will be getting revenue daily without you directly doing anything per se. Another example could be maybe you build a residential building that you exclusively rent out to tertiary students.
You will be getting income passively without any direct work; in essence, you would have created a system that churns out income whilst you are focused on other things. These are just a few examples but they are nowhere near exhaustive of the number of ways in which you can generate passive income. Interestingly, most millionaires out there have 7 income streams namely, earnings, profits, interests, dividends, rentals, capital gains and royalties. If you truly want to become wealthy you must strive towards having all 7 of these.
If you spend money willy-nilly without any planning, monitoring and evaluation of some sort then wealth creation is alienated from you. The first thing in managing your expenditure is budgeting – it might seem ordinary for most people but it is important. I have always encouraged people to budget their money by using percentages. That way you have a working system that applies to any environment rather than dealing with amounts. Make sure you allocate a percentage for savings because that is one of your appendages that feed into wealth creation. You should endeavour to save as much as possible; the more you save, the faster you draw closer to being wealthy.
When you come up with budgets make sure you stick to them no matter what. When purchasing non-basic items take time to think it through – some use what is called the 24-hour rule. This means you give yourself at least a day musing on whether or not you should buy a non-basic item. Impulse buying must be far-removed from you at all times. You can also assess your purchase of non-essentials using the income rate rule. Suppose you earn ZWL$800 a month whilst working six 8-hour days week. That means you earn roughly ZWL$4 per hour. For instance, you are thinking of buying a ZWL$100 non-essential, you ask yourself whether it is worth 25 hours’ worth of your work. The bottom line is that you must ruthlessly check your expenditure and that goes a long in unlocking disposable income.
I cannot underscore this enough because multiple income streams denote multiple investments in most cases. Word of caution here; be very careful what you invest into because you can lose out big time. Some of the best fields to invest in are construction, agriculture and real estate, just to mention a few. However, every contemplated investment must be treated according to its own merits. You must do your homework and conduct thorough due diligence to ensure you are making the right investments. Making investments can itself alone create billionaires – Warren Buffet is a notable example of someone who stepped into wealth through making investments.
With these 3 principles, you can become wealthy no matter who you are or where you are from. If you want to then you most certainly can. Albert Einstein once said, “I CAN is 100 times more important than IQ”. You need only be patient, disciplined and industrious whilst rightfully applying these principles. In the Bible, there is a portion which talks about how that one who is faithful in little will be faithful in much. So start from where you are, practise these 3 principles and you will see remarkable changes as time ensues. There is more than enough wealth in this world for all of us and future generations so go grab your share using these principles.