Daphne Byers, Advice Partner at The Wealth Corporation
I recently read an article online titled, “Top 10 ways to become rich”. Upon completing the article, it was suggested that I might be interested in the following articles: “5 traits tomorrow’s millionaires possess”, “9 things rich people choose to do that poor people don’t”, “7 ironic things that poor people do”, and “Top 10 habits that make you rich”.
The precept of the article is sound – that your wealth will ultimately be determined by the little choices you make every day. However, what was most disturbing was firstly, the preoccupation with being either rich or poor that seems to abound and second, the looseness with which the terms are used.
The Merriam-Webster dictionary tells us that the definition of rich is: “having abundant possessions and especially material wealth”. However, being rich means enjoying financial freedom. That, in turn, is not a magical number with zeros as far as the eye can see, but rather the point at which one’s income exceeds one’s expenses.
The author of the article that I read went on to list the top 10 daily habits that are supposedly “strong predictors of wealth and success” in the near future. These can be summarised as follows:
- Set goals for each day
- Talk less, listen more
- Be healthy
- Network and volunteer regularly
- Watch TV less
- Read more
- Hone your skills
- Think positively
- Save money
- Spend time with like-minded people
While these are noble habits in and of themselves, it can be argued that the only reliable predictor of one increasing one’s wealth is saving money. Interestingly, this appears at the very bottom of the list, just above spending time with people that are like-minded.
To expand on this point, the author states: “Studies have shown that managing your money effectively can help you become rich. If you manage to control your expenses and save a percentage of your earnings each day, it is guaranteed you will be much richer than you used to be in no time.”
Creating wealth is a journey and there are no short cuts. I believe that more useful and practical habits to help you on the road to wealth include the following:
- Establishing an emergency savings account
- Avoiding credit card debt
- Setting realistic long and short term financial goals
- Saving routinely to realise these goals
- Creating a financial plan with the help of a qualified advisor
- Investing your retirement savings in solutions with appropriate investment returns and time horizons
- Putting an appropriate risk management plan in place
- Writing a will to ensure your dependents are taken care of in your absence
- Reviewing your financial plan and will regularly
Are you allowing this 10 point plan to grow your wealth and achieve financial freedom? The decisions you made today determine the reality that you face tomorrow.
Your financial advisor will be able to help you to put the necessary plans and processes in place so that you can welcome tomorrow.
DISCLAIMER: This publication has been compiled for information purposes only and does not take into account the needs or circumstances of any person or constitute advice of any kind. It is not an offer to sell or an invitation to invest. The information and opinions in this publication have been compiled by The Wealth Corporation Proprietary Limited (The Wealth Corporation) in good faith from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or correctness. The Wealth Corporation accepts no liability whatsoever for any direct, indirect or consequential loss arising from the use of this document or its contents. The Wealth Corporation Proprietary Limited (registration number 1996/013143/07) is an authorised financial services provider.
About The Wealth Corporation
The Wealth Corporation was founded in 2001. Since then, they have experienced considerable growth and gone through many changes, including the establishment of a national footprint and their partnership with Citadel in 2012. They have a proud history as being thought leaders in the industry, developing best practice in client service and advice processes and leading by example. Their advisory solution offers a complete view of the retirement planning and management process, looking at all aspects of financial and personal well-being. This process is called Integrated Insight