Here is an interetting thought that caught my eye the other day.
I have already said that wealth is not money, nor the signs of affluence, such as cars and holidays. Rather wealth lies in your ability to see and pursue opportunities to make the money to buy the right assets to increase your wealth.
If we look at wealth from this point of view, is there a limit to wealth? No, there is not! If wealth means the ability to “create money”, so to speak, there can never be a scarcity! Wealthy people understand this and tap into as many sources of wealth as possible.
And yet, there are so many people out there who live with, what is called, “a scarcity mentality.” First of all they think wealth equals money and then they “know” there is not enough money. And the conclusion, only a few people can be wealthy and unfortunately, unless you are “chosen”, you can’t be wealthy.
And this is the idea that I read. Most people grow up in households where they learn that there is not enough MONEY to get the things they want, and that is why they think there is a limit to wealth and not enough for everybody.
I try to think like this (and I mean try): “How can I afford it?” What can I do to afford the car I want? And by that I normally want somebody else to pay for it. How can somebody else pay for this expense? Sometimes I am successful and get the solution and sometimes I keep on driving the car I have.
But thinking in this way, helps me see the opportunities! When I started my business a few years ago, I took a small loan. The bank keeps nagging me to take up MORE than the repaid capital. Which I have refused. The other day somebody said they needed cash to make a deal work. I said: tell me about it. The upshot is, I get a share in the business, I borrow the money from the bank and lend it to the business who pays the full premium, which improves my cash flow.
Yes, if the business does not work, I will have to pay the money back – nothing comes without risk. But with this cash, we already generated more income than the loan! With the income re-invested we can generate more income. I am creating wealth.
Not because I am so good, but simply because asking the right questions makes me “tuned to the right wavelenghts.”
I am always going on about building wealth and creating financial freedom. I wonder if people realise how important this is? There is something in us that always feel it will somehow be better in the future. We hear and read that less than 6 out of 100 people will ever be able to retire. But there is this inside us that blocks the reality out.
So let’s look what you can do to become financially free and create wealth.
Financial freedom and wealth is the result of getting your money to work for you, instead of you working for your money! It implies that you should constantly divert some of your income to assets that work for you.
Let’s see what you can do to achieve this.
One way to create wealth, is to build a big business. Think Wal-Mart or Pick ‘n Pay, or Microsoft. You start with one store that is successful and you duplicate that success as many times and as often as possible. You appoint the best people possible to run it for you and you list it on the stock exchange. Very few people achieve this. Look at the number of companies listed on the stock exchanges of the world, to see what I mean.
You could start a Multi Level Marketing Business and build it wide and deep. Once again, for various reasons which has nothing to do with MLM, very few people ever attain real financial freedom. But it is an excellent business school.
You could write a book that becomes a bestseller that is turned into a box-office hit film and collect royalties forever. Or perhaps you can compose and write a hit song. Once again, very few people ever achieve this.
You could, like Warren Buffett, buy a business with an excellent cash flow and invest that cash flow into another business with an excellent cash flow, and just keep on repeating the process. But Warren Buffett is the only person ever to become the wealthiest person in America without his own business, like Bill Gates.
The one thing that is achievable for most people, is a business similar to that of Warren Buffett, in property. Most people can somehow afford to buy a house or flat. If you re-invest the rent (cash flow), you will repay one business (property) very quickly. Then you divert all the cash flow into another business (property) and you keep on repeating this.
The nice thing is, the knowledge to do this is generally freely available (I do free seminars in Cape Town)! And it is something of which we all have the basic knowledge to understand the bigger picture!
But remember – invest in yourself before you invest your money. Unless you do that, you have a bigger chance of shrinking your wealth than creating wealth!