Building wealth is a process, more like erecting a building. It builds gradually. If we take a scientific approach, we should take out the strokes of luck and chances, though they have some role in building one's fortune. Instead, take it as a systematic process.
The hardcore trait of creating wealth is: Wealth Builders are Aggressive Savers. Rain or shine, a professional wealth builder (who manages and builds his wealth professionally!) must put aside some of his money into savings. THIS IS THE REAL CATCH!
The best way to save is regular savings, like monthly PAC (pre-authorized chequing), where a pre-set amount of money is taken out of your bank account, and put into any type of investment. In this way, we make sure that we keep on saving!
FUNCTION OF TIME
An intelligent person knows that, any growth is function of time, be it money or skill or knowledge. The more time is spent on something, the more growth opportunity is created.
WEALTH = f (TIME)
EXAMPLE:
I give you a stupid simple example. Let's say, you put your money in a bank savings account, which gives you 12% interest per year. Now, you put $100 of your money into this savings account.
- If you put your money in January 1 and withdraw it in December 31:
- total earning: $100 * 12% = $12
- Instead, if you put your money in December 1 and shortly withdraw it in December 31:
- total earning: $100 * 12%* 1/12 = $1
This simple example illustrates that, the more time your money is invested, the more growth is there, other things kept constant (like alternative growth opportunity, risk, inflation, tax).
VISION OF RICH
The serious wealth builder has a vision. He sees himself RICH! The more specific and determined that vision is, the more power there is. Instead of focusing on spending, he focuses more on saving and creating assets. As wealth is function of time, over long run, this systematic effort reaps the harvest of wealth.
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