The Path to Wealth Creation

‘Wealth creation’ sounds heavy, doesn’t it?  Put it this way:  if you can balance a budget successfully and have a little left over each month, you have already started.

Does that surprise you? Well, it really is that easy, as long as you have the hunger and drive to carry that attitude through into wealth creation strategies.

Wealth CreationBut there’s one thing you must do first. Get rid of your debt. Forget about the mortgage at this stage – we’re talking about loans, credit card debt, hire purchase and all those other nasties that take large chunks out of your income each month. Make a concerted effort to rid yourself of those big black clouds by consolidating debt and paying off as much as you can each month.

At the same time, consider how you can start creating wealth. The ideal is to create more than one income stream. Then, if one source stops, you can fall back on others. Remember, wealthy people do not rely on one wage-earner in the family. They will have other income sources, like rental income, businesses and investments.  But don’t let that put you off! You will be starting small and the rest will come as your drive to succeed bears fruit.

The first rule of wealth creation is to spend less than you earn. You’ve probably heard it before, but have you really thought about what ‘spending less’ means?  Remember, spending includes everything that flows out of your income, including tax.  Start by cutting out those coffee breaks and lunches.  Forget about labels – unlabeled things work just as well.  Make use of the clothes in your closet rather than buying new every time you go out.  Don’t buy something simply because you like it.  The question to ask is; do I need it?

Here are some important tips to start you on the path to wealth creation:

  1.  Generate extra income by taking a second job and cutting back heavily on your pending. When you are ready, find out about investing in property.
  2. Manage your expenses by minimizing your tax, ensuring you are using the cheapest utility companies and reducing other unnecessary expenditure. You can find lots of good tips on the Internet that will help you to spend less.
  3. Start building up investment assets such as rental properties, your share portfolio and cash reserves.
  4. Manage debt wisely. It can be a good move to borrow when buying an asset such as a rental property, but it is unwise to borrow to buy luxury items like a new car or boat which lose value immediately.
  5. Protect your ability to continue earning by buying income protection insurance and life insurance, particularly if you have dependent children.

It’s not rocket science, is it?  Don’t be daunted by the list above.  Just take it slowly and work your way through.  It doesn’t matter if it takes months or years – the important thing is that you are on your way towards wealth creation. All it takes is a lot of determination and sometimes, a little bit of luck.

Enjoy your journey towards wealth creation.

Virginia Bergman (VB)  :)

Comments

  1. Kendy says:

    Cut all expenses and do not spend much on things not worth spending for. Use your extra money in investing – be smart enough to think of new things that will generate income. Once you’ve one source of income aside from your job, get a new source until your path to success draws your way. Good tips Virginia! Not everyone has the guts to cut down their breaks and lunches for the benefit of their income sources.

  2. Lee says:

    Hi enjoyed your post. My philosophy with bedtime has always been quite simple. If I haven’t got the money I don’t buy it. I only use my credit cards as a short term interest free loan and make sure I play them off in full within the 28 days of the statement coming in. So that I don’t incurr any charges. This way when I go to bed I can sleep soundly without worrying about money matters

    Thanks lee

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