7 Steps to Building Wealth
What do you imagine when you hear the word “Wealth”? Is it a wholesome bank account or a 6-acre mansion overlooking the sea? Or is it the capacity to single-handedly run an orphanage for the less privileged? Whatever comes to your mind, it is worth striving for.
Here, we guide you on a few steps to grow your wealth.
The journey to building wealth starts with auditing your current financial situation, the sources of your income, what you are spending money on, and the process ends with having multiple income streams. In between these extremities lies the real work of building wealth.
Step 1: Track your Expenses
If you intend to have all the things money can buy, you may need to adjust your relationship with money. Drawing up a budget is the first step to achieving this. More important is sticking to the budget, and tracking where the money is actually going. Mobile apps like REACH are available to help keep tabs of where your money is going.
Step 2: Plug the leakages
Once you have an overview of how you are spending your money, it’s time to plug the leakages and put a stop to your draining bank accounts. Often times, most leakages come in the form of restaurant bills, impulse online shopping, airtime and internet subscription. It takes a high level of discipline to cutback on guilty pleasures and indulgences that have become a habit. Regardless, the journey to wealth demands that you cut them off.
Step 3: Educate Yourself
If you have the means, invest in a Wealth Advisor. Otherwise, it’s time to start paying attention to every bit of news, related or unrelated, to finance and investment. Be in the know because investment opportunities can open up in any sector and at any time.
Step 4: Build a Savings Habit
Savings is the first step to investing. A lot of individuals have been brought up on the savings culture although it is sometimes difficult to keep up. The best strategy to successful savings is to save first and spend what is left of your income.
Step 5: Invest the money you’ve Saved
If you are new to investment, it is best to start with a stable investment asset such as Fixed Income products like Treasury Bills and Wealth Cash. For high risk and potential higher returns, invest in Stocks.
Step 6: Reinvest the profits
Reinvest the profits from your investment and take a long term view to your investments. This will help build compound interest. Compound interest is one of the most important concepts to understand when managing your finances. It can help you earn a higher return on your savings and investments. Start investing early and start investing often.
Step 7: Build up multiple income streams
Once you have mastered the art of investing, begin to diversify your investments. Depending on your risk appetite, Stocks are good assets for accelerating growth of wealth. Alternative investments like Agriculture and Real Estate are also interesting investment options. A fair number of investors choose to put their money behind government backed funds such as Treasury Bills for a guaranteed return on investment. You can access all these investment options right from your Wealth.ng account.
