careernav.

So you want to create personal wealth! Let’s agree up front that is a perfectly normal desire.

Personal wealth means different things to different people – what is it for you? Is it an amount of money in the bank? The flexibility to retire before you reach 50 years of age? The ability to purchase whatever you want? Or just to be filthy rich with millions in free cash and to be debt free?

It comes as no surprise there is no shortage of individuals and companies professing they can show you the short cut home with a quick get rich scheme. But for most people wealth creation is more difficult, but a worthy goal to chase over your lifetime. Here are some factors you should consider;

• You may not be able to become rich overnight, but anybody can try to create personal wealth every day of their life. This is very different from a get rich quick scheme, requiring continuous effort and dedication, hard work and patience, focus of energy.
• Saving is the first priority. If you’re an average person like most of us, you need to save to create great wealth. New ideas and businesses are valid ways of creating wealth, but even if you have an entrepreneurial streak it is better to start somewhere solid.

Some argue the road to wealth begins when your net worth (adjusted by the net inflow and outflow of funds) is positive, When you reach this position you have spare funds and can now begin to save a portion of what you earn each month. The more you save the wealthier you become.

Others argue that setting a savings goal comes first; you develop a savings habit when you are young and only draw on your savings to fund other investments - never for personal use.

If the bottom line of savings is to achieve a comfortable retirement, one view is that you should save 15 percent of your annual pay starting at age 30, and pay off all your debts by age 60. One absolute fact is the younger you start, the greater the cumulative effect of your savings. Note the cumulative difference by saving $1,000 per month at 6% compound interest until you reach the age of 60. If you start at;   

• 50 years of age at 60 you will have $164,698
• 40 years of age at 60 you will have $464,351
• 30 years of age at 60 you will have $1,009,537
• 20 years of age at 60 you will have $2,001,448 

So the number one savings strategy is to auto pay yourself first from every pay cheque, via direct debit into a term deposit account. That’s right, everything else is secondary - rent or mortgage, utilities, food, credit cards, car loans, and any other payments. Make more salary or spend less to enable this strategy to work. Adjust your lifestyle.  It is the key foundation to building your wealth.

The second savings strategy is to purchase only what you need and ask yourself before each purchase, ‘Do I really need this?’When the answer is 'no', then start eliminating the “no's” and make an additional deposit into your term deposit account. It is a brilliant counter to impulse buying. These are savings over and above the “pay yourself first” strategy described above, which continues every pay day, irrespective.  Save, save, save and stroll the road to riches.

2.   Get the savings to work for you.

There are numerous options available;

• Financial markets with Stocks, Bonds, Foreign Exchange and other instruments
• Long term securities such as gold, silver and diamonds
• Property markets - buy renovate and sell, negatively gear a rental property, considering commercial buildings versus residential houses
• Specialist investments such as art, antiques, classic cars
• Become an entrepreneur
• Start your own business, perhaps a proven small business, a franchise, or go into partnership.

3.   Back yourself and your judgement.

Whether you are an employee or an employer , the one thing in this worl d you have direct control over is you and your own actions.

•  Acquire knowledge, cultivate your skills, work hard, dedicate yourself and leverage what you know.
• Understand your unique point of difference, what you know most about and your personality strengths. The intersection of these three factors creates your high performance cell and the area in which you are mostly likely to succeed.
• Understand the culture and environment you best perform in and you now have a working model to apply to maximise your high performance.
• Get a formal as well as informal education, accumulate life experience, and learn from your mistakes as well as your successes.
• Keep healthy and fit, maintain your primary asset (you) in the best shape you can.
• Make wise decisions regarding your resources you currently have on hand. Create a budget and stick to it.