As far as the management of personal finances is concerned, much can be learnt from the large, successful companies. A company has the same goal as an individual, namely to use scarce capital to build the greatest possible wealth as time progresses.
One of the primary methods that companies use to achieve this goal, is to regularly invest back part of their income. This capital is then used to earn a high return. The retained income grows as time passes, and after a few years the company finds itself in a far stronger financial position than before. From this increased capital base great future wealth is created.
The same rule applies to the individual. He or she also has to save part of their income, just like a successful company does, to form capital with which great wealth can be created. One of the requirements for building wealth consistently is a percentage savings plan which can be used to build capital.
Quite simply, a percentage savings plan means saving a percentage of your income each month. This may seem an unattainable goal for those not using such a plan and who utilize all of their income. However, a fundamental economic rule is: an individual’s expenditure should be adjusted to suit his expandable income; the person will automatically spend less. Should a person force him to implement a percentage savings plan, then his expendable income will be reduced and his spending requirements will also decrease gradually.
He will find himself in a position where he is able to do with less. While he builds wealth. The basis of this plan is behavior modifications: commit yourself to a percentage savings plan and stick to it. It might be difficult initially, but you will soon become accustomed to it, and it will become a habit.
When beginning such a savings plan for the first time, it should be started on a small scale so that the change is not too drastic. One could begin by saving only 1% of your monthly income. The percentage could be raised gradually until the target percentage is reached. An ultimate percentage of 10% will place you firmly on the road to long – term success. Over the long term, this will ensure that you will rise above others in the financial arena.
The monthly savings can be invested in any manner you desire. It is advisable to spread these investments using a variety of investment channels in order to minimize your risk and to increase your returns. How large would your wealth reserves have been today, had you saved 10% of your income for the past 10 years? Start today. This is one of the most important keys to financial success and everyone can achieve it.
How you can be wealthy
There are only three things you need to be super rich… and not of them is money! The three things you require to become truly wealthy fit together like bricks used to build a house. Each one is essential and not one can be omitted
Your Own Business Gets The Ball Rolling
The point of departure in becoming wealthy is firstly, your own profitable business. If you already own a good business, you should quickly add a second or even a third business.
The secret to becoming wealthy is running a business of your choice. Regardless of whether it is a full time or part time business, it must be a business you are comfortable with and it must interest you. It has been proven time and again that the most successful businesses are those that the owner is personally interested in, you are the boss. There are no retrenchments to worry about, no routine that you don’t like and no working hours that don’t suit you.
There is no denying that the right business is the very best way of making money and therefore it is the first step on your road to wealth. Your own business doesn’t have to be a large business – at least not in the beginning stages. Your own business, however small, if managed correctly has the tendency of growing and growing.
A small part time business run from home is the ideal way of getting the ball rolling. On the other hand, if you prefer to do so, you can quickly own a large, full time business. The scale you would like to start your business on, will depend on your personal needs and preferences
Whatever business model you decide to start running and on whatever scale you do it, there are helpful aids such as a business plan and clever marketing techniques that should reside in any business to ensure its success
Apply your money correctly
The second step on your road to becoming wealthy is to use the money you make correctly. To build great wealth, it is not only how much you earn but also what you do with the money you earn. In short, what you need is spending expertise. There is a golden thread running through the money you save in your monthly budget, through buying expertise on the goods you need, to the point where you legally pay as little tax possible.
By using spending expertise you can enjoy the lifestyle you desire and build wealth. You can build wealth by buying the things you like.
Make A Fortune Using High Growth Investments
The third step on your road to becoming wealthy is using high growth investments. Convert the money you make in your business, and from applying spending expertise into a fortune by using high growth investments. Incidentally, clever investments not only make you truly wealthy, it also protects you during a financial crisis.