By Babajide Komolafe
In the last edition, we established the fact that it is very very rare to see someone who is ‘Young and Wealthy.’
It takes time, mostly more years to build wealth legitimately. Hence, 75% of top billionaires are between ages 50 and 70 years. This is the first fact every person that wants to build wealth legitimately must recognise.
Next, you must recognise the basic ingredients of building wealth. These are presented below.
The first basic ingredient of legitimate wealth creation is regular income. This comes when you provide a service or product that someone is willing to pay you for.
Income can be your salary, profit from a business or return on investment. Your income may be small today, especially when you are still young and at the beginning of your career, or beginning of business. The good news is that your income can and should increase over time through a combination of factors.
Now four things determine your level of income in life. The first is knowledge, the second is skill, the third is relationship or network and the fourth is diligence or hard work. To earn more money, you must acquire more knowledge, improve your skill, oil and widen your network, and be more diligent.
So, to the young person that desires to be rich, seek ways to generate income, get a job, a legitimate one, or start a business, or render service. Seek legitimate ways to increase your income and be diligent.
The second basic ingredient of wealth creation is regular savings. This implies you do not spend all your income. Young people have a high propensity to spend money. Hence, they mostly spend all their income. But this is not wise and it is a sure recipe for poverty in the future. Any young person who wants to be rich must develop the habit of spending less than his/her income. One way to achieve this is to commit to saving a certain percentage of your income. This commitment is necessary before you grow to a higher income level.
The third basic ingredient of wealth creation is investment. This is making your money work for you. You put the savings in activities that will earn you additional money. To do this successfully, devote time to find out and acquire knowledge about various types of investments. You can read my previous articles. When you save and invest regularly, your income will increase and this in turn increases your ability to save and invest and earn money. (To be continued)