This Wealth guide details the process of increasing wealth, and is supported by a number of scientific principles. Wealth creation is not magic, it grows from taking specific disciplined action, consistently.
Improving wealth can be done in a myriad of ways, but there are a few key principles to bear in mind which apply across many different strategies for wealth building.
Before we move on, let’s just look at what we mean by wealth.
We are talking about wealth in the sense of…
“A measure of what you OWN (assets) over and above what you OWE (liabilities).”
For example, let’s say you have no money in the bank, although you own a house that’s worth £200,000, still owe £125,000 to the bank for your mortgage. Your possessions, which you own outright are worth another £10,000. Your net worth would be calculated as follows:
- £200,000 home value
- £10,000 possessions value
- £210,000 total ASSETS value
- £125,000 Mortgage owed to bank
- £85,000 (£210,000 – £125,000)
Sorry if this seems rather basic for you, but I want to make sure we cover all the bases, so everyone understands it from the ground up.
When it comes to increasing net worth (wealth) we need to distill it down to its purest form. Wealth comes from 1. increasing your capacity to earn income (more money), 2. keeping your expenses as low as possible (certainly less than your income), and 3. investing any surplus (the difference between income and expenses) to further increase your income and wealth.
We will look at each of the components required for increasing wealth:
- Increasing INCOME
- Keeping EXPENDITURE as low as possible. (including liability costs)
- Using SURPLUS to buy ASSETS that will further increase INCOME, and grow WEALTH
This is the mechanics of what we are trying to do. However there are a vast number of alternative ways of going about it, which depend on your own unique set of circumstances. These include…
- What you’re interested in,
- What skills you possess or are willing to develop,
- Your risk tolerance,
- The time you have to accumulate it,
- From what position you’re starting from.
There are many different opportunities for making income. Much of it depends on your preferences, your skills, what you enjoy doing, what you are good at and so on.
Never too late to learn
We can always look to increase skills, or even go off at a tangent and do something completely new if we so wish. It really is never to late for a change of direction, considering we are living and working longer.
Get educated to earn more
Being a lifelong learner is really a state of mind. If you are hungry for knowledge, particularly knowledge that benefits your income, there is always more to learn and always opportunity for improving yourself. I also think it’s prudent to look to develop greater knowledge and skill in something that is easily transferable to a different domain, such as sales skills, or ability to work skillfully with your hands. As the world changes, we must be ready to change with it, or get left behind.
Multiple streams of income
Having more than one way to earn money is a opportunity to hedge your bets, particularly in a fast changing world. The old days of having a job for life is long gone. When you’re looking at multiple income streams, you’re choices include,
- Getting a second job that fits around your main job,
- Running a sideline business in your spare time,
- Investing in assets.
Now, you have only so many hours in a day. You might like the idea of working 18 hours a day, and if so, great for you, but 18 hours is still a ceiling, which will put a limit on your earning potential.
When you have a job, are a sole trader or freelancer, you are trading time for money. If you don’t work, you’re not earning.
Also in the case of being an employee, you may be subject to the higher income tax rates. You are able reduce these to some degree if you’re a sole trader, as you can offset tax against expenses. If you are a director in a limited company, you can take money out as dividends which are often treated at a lower tax rate.
You can maximise your income potential by focusing on higher income activities. Going for a job that earns £20 an hour over one that earns £12 an hour for instance. Although higher paying jobs will involve taking on more responsibility, or providing a higher skilled service, and of course are harder to find. However a nice side effect of working longer hours is that you have less time to spend your income, so can save more.
Tip: be a problem-solver, rather than a problem-spotter. If you see problems at work or in the world in general, provide useful solutions, instead of just pointing out problems, you will be better rewarded for doing so.
Residual income: Stop trading time for money
One way to break free of any income limits is to move away from a “trading time for money” income model to one that frees you from this burden
Residual income is one way to do this. Residual income (also called passive, or recurring income) is income that continues to be generated after the initial effort to create it has been expended. For instance if you write a book and sell it, you only have to write it once (barring updates etc) and it continues to provide royalties for as long as people keep buying it. If you’re a song writer, and you produce a popular tune, you will keep receiving royalties each time someone buys it or plays in on the radio or TV.
Start a business rather than being an employee
One way of separating yourself from trading time for money is to build a business, I’m not talking about a one man band, sole trader type business, but one with employees that do the work on your behalf.
Business is a great way to leverage other peoples’ effort, time, and skills for your benefit. Don’t get me wrong, running a large business isn’t easy, there are lots of skills and knowledge necessary to be successful. You have to have a high capacity to live with risk and uncertainty. It can be very stressful and all-consuming, but it can also be a path to financial freedom. There are hundreds of business models, check out our ultimate business guide for more information.
Just a side note at this point, having a website that sells 24/7 is an appealing, low cost option, well worth consideration, but don’t be fooled into thinking it’s easier than running a regular business, because it isn’t. It requires all of the same skills, time and dedication, but often doesn’t have to cost quite as much to set up.
Just a few additional tips to consider about income before we move onto the next section.
Add more value then you take in return. This isn’t just an income orientated tip, but a lifestyle one. Provide value, in all aspects of life.
Consider the type of value you provide to customers:
- Uniqueness – unique value can be charged more for
- Impact – the degree you improve people’s lives
- Scope – the number of people you reach
- Perception – people’s perception of the value you provide
Go the extra mile. Again this doesn’t have to apply just to how you earn income. Make it a lifestyle. People will forget what you said or did, but they will never forget how you made them feel.
Under promise and over deliver. We are so used to businesses doing the opposite of this by over-promising and under-delivering, it is one of the main reasons for customer complaints. Stop doing it, be honest and open with people. By doing so, you will become more trustworthy, and will be rewarded for your honesty.
Keeping EXPENDITURE as low as possible
When it comes to keeping your expenses as low as possible, it’s important to understand that there is a trade off to be made. If you live frugally, you are likely to limit the quality of your life to some degree, but you will maximise your saving potential. If you enjoy the higher priced luxuries in life, you’re going to have to be prepared for slower savings growth. It’s your choice.
Choices, choices, choices
It all comes down to choice, what kind of life do you want to live. Living in luxury is okay as long as your earnings allow for it. If not, you will either have to double down on increasing your earning potential, or make cuts to your spending.
However you decide to increase wealth, you’re going to need to make sure you spend less on expenses than you earn. In other words, start living within your means.
The ultimate situation for increase wealth is not to spend anything that doesn’t either appreciate in value or provide an income. The closer you can get to this ideal, the better.
I just want to cover the subject of liabilities before we move on. A liability is something you are still in the process of paying off (usually in the way of monthly repayments) and have a legal obligation to keep paying for, until the debt is paid off.
Liabilities tend to be incurred when buying big ticket items, such has a house, or car, that you can’t afford to pay for outright, from your savings. You may use some form of finance or loan to buy it initially and then make regular payments to repay the debt off plus any interest that’s being charge by the lender.
For instance, if you buy a house, the house is an asset, generally considered an appreciating asset, in that it is likely to be more valuable over time. But the debt, the money you lend from the bank to pay for the house, is a liability. You are legally obliged to pay it back every month through your mortgage repayments, which include interest and an amount to pay off the house, and usually over 25 years or so.
A car can also be considered an asset, it has some worth if you wanted to sell it, but it’s a depreciating assets, in that it will lose value each and every year. Again the liability comes about from the cost of paying back the debt that you use to purchase the car, including interest.
Now if you bought the car outright from your savings, you haven’t actually incurred any borrowing costs or debt (you haven’t incurred any liabilities), you have simply transferred savings from your bank account into the car. However the car is a depreciating asset that will be worth less each year, and will in the process, lower your wealth.
The car will also incur maintenance costs (MOT, servicing) and running costs (petrol) and unforeseen breakdowns etc. So a car is a bad investment when you’re trying to build your wealth. However if you need it for work, and do a lot of mileage, it can work out to be the cheapest option compared to the alternatives, such as public transport or taxis etc, and so might be the best option available for you, and a necessary cost.
Liabilities also include utility bills like gas, electricity, and water rates, the must-have, household bills, which you are obliged to pay for as you use them on an ongoing basis. Council tax and personal income tax are other types of liabilities.
Now, having said that, not all liabilities are bad. Having a mortgage for your home is often financially more beneficial than renting. Renting is dead money. You give it to the landlord each month for the right to live in the property, but as soon as you stop paying, you can no longer legally continue to live there. 25 years later the same applies and you have nothing to show for all the money you spent in rent. If you take out a mortgage, 25 years later (or as long as the mortgage term is) you own the property outright (as long as you continue to pay your mortgage repayments), and any rise in the properties underlying value is yours.
Minimise consumable products
A consumable product is something that you use once, then it’s gone. They are destroyed, dissipated, wasted, or spent when used. Avoid buying consumable products wherever possible.
Food is a consumable product, but of course you have to eat to live, so obviously you can’t stop buying food and drinks, but you can look to reduce your spending in this area by:
- Shopping at cheaper stores,
- Buying cheaper brand alternatives, such as own brands or no frills alternatives,
- Quit buying ready meals and opt to make your own.
Here in UK brands like Aldi are taking massive market share from the likes of Tesco, and Asda, largely due to their discount pricing model, which means you get a lot more shopping for your money, and the quality isn’t bad either.
Away from food, other consumable products would include:
- Personal care products,
- Cleaning products,
- Experiences – like holidays, concerts, theater, experience days.
Again, I’m not saying you can never buy any of these items, of course you can, but there is an opportunity cost to buying them, especially the non-essential items. The bottom line is £5 spent on a personal care product, means £5 less in savings, which doesn’t sound a lot, but adds up over time. Again look for cheaper brands or natural alternatives that cost less.
Avoid buying unnecessary “stuff”
Following the latest trends, buying stuff you use once and then never use again, and generally spending on stuff you don’t really need is not just a waste of money, it’s using up cash that can be used to grow your wealth. There is an opportunity cost to everything you buy.
Buying a big ticket item like a new car not only increases your liabilities it significantly impacts your monthly expenses. Each time you add to your liabilities you are adding to your expenses and further reducing your wealth generating opportunities. Liabilities like cars, depreciate in value, and take money out of your pocket not just on a monthly basis, through your finance costs, but as the car loses value as it gets older and does more mileage. There is a cost and a big cost.
However if you start using your car as a taxi, then it becomes an asset, because it’s generating income and as long as it’s putting more in your pocket then it’s taking out, an asset it will remain. I’m not saying you should use your car as a taxi, but I want you to think outside the box, and look for creative ways to utilise what you have at your disposal.
Discounts, vouchers, rebates
Look for discounts, vouchers, deals, rebates and the like. Usually this means doing a little bit of work in preparation. You might have to cut out vouchers from magazines, enter competitions, join clubs, whatever. My sister-in-law sent 1000’s of dollars worth of goods to her family, at a fraction of the regular price by doing this.
When you get a discount for something save the difference, you’ll be surprised how quickly it adds up.
When you’re in a shop look for in-store deals and discounts. Shop at quiet periods, off peak times for instance. Me and my wife go to the market when it’s near to closing time, traders are trying to get rid of stock that might otherwise go off, and you can get some really good discounts.
Haggle with the seller, and be prepared to walk away if you don’t get a deal. You’ll be surprised how much merchants will be willing to discount to close the sale.
Now I’m going to make a caveat here, don’t just buy cheap, if the goods are low quality, they might not last very long, and you will have to replace more frequently. I’m thinking of items like clothes, which go out of shape, loose colour and look tatty very quickly. Sometimes buying cheap is a false economy. Buying five T-shirts for £2 isn’t likely to yield great quality, so tread carefully.
Another thing to bear in mind, if you use what you buy frequently, then paying a little more for it, might still provide value for money. For instance £10 spent on something that you never use is wasted, while £1000 spent on something you always use, could be considered good value for money.
Being first is expensive
Being an early adaptor is generally more expensive, because you’ll pay through the nose, compared to later users. This is generally because manufacturing gets cheaper with greater volume, so coming to the party later usually means you get a much better deal.
Same goes for keenly following fashion trends. Old stock gets cheaper when retailers are looking to bring in the latest fashions, and clear what they still have on the shelves.
Buying snacks in cinemas, or drinks when you’re desperately thirsty can result in you paying more. Being a captive audience or seeking convenience means you will inevitably pay more for your purchase, than you would have done if you had been better prepared. So plan ahead.
Following closely on from this is, avoiding impulse buying – plan and make a list before you set off, that way you don’t get sidetracked or fall for any temptations or distractions.
Also know the value of things before you buy them. Comparison sites are a good place to check out, particularly for insurance, hotels, and holidays.
Look at the prices of what you buy in the supermarket, don’t just throw things into your shopping trolley. You’d be surprised what savings can be made by being a little bit more observant.
Do your research to find out when an industry is on the downside of its demand curve and buy, buy, buy.
Know about the secondary market, which include returns or refurbished products.
Expose your purchases to competition, such as auction sites and the like. Ebay and Amazon offer a range of prices for the same product.
keep tabs on your spending
Often people have no idea where their money is going. This is made worse because they don’t use cash to buy things, it’s done electronically, we’ve even got contactless payment now. Businesses and banks know you’re more likely to spend if there is less friction in the purchasing process, and you’re less likely to keep tabs on how much you’re spending. Don’t be fooled, keep a detailed diary of every penny you spend. Tot it up at the end of the month. What would you consider a good spend, and what would you consider wasted. Improve this ratio going forward.
Also check purchase receipts, change and bank/card statements. The amount of times I’ve discovered someone has overcharged me, or not given the correct change. It can mount up, so be vigilant.
Pay off debt first
Pay off debt as a matter of priority because generally interest on debt is higher than any interest earned on savings. Have just enough rainy day money for emergencies in the bank as a safeguard if you must, but if you need money later, then you can always borrow it at that point. This is the best piece of advice I’ve ever been given personally.
I’m very safety conscious. I like the feeling of having money in the bank for emergencies, a lot of people do. But from a pure economical standpoint, and removing the emotion and fear of what might happen, it just doesn’t financially make sense to have, say £10,000 in your bank earning virtually no interest (currently less than 1% here in the UK), whilst owing £10,000 on a loan that’s costing you 4%.
If you pay off the debt, you save yourself £400 per year on interest payments. If it’s a 5 year loan, that’s a wacking £2,000 over the course of the loan for the privileged of having a sense of security. It’s a lot of money, which could be going towards increasing your wealth.
If you pay the loan off and then save the money that you would be ordinarily paying back to the lender each month, you would have the money back in your account, in much less time than the duration of the original loan. Okay you have forgone the interest you would have received, had you left the money in the bank which at 1% (to round it up) would be £100 per year or £500 over the 5 years. That’s much less than the £2,000 you saved by paying off the loan, you’re still £1500 better off.
Some other tips for saving money:
If you don’t use it lose it – recurring subscriptions and memberships can be a real drain, particularly if you’re not using them. Cut anything that’s not providing you value or being used.
Don’t buy new if you already have a lower cost alternative, for instance, your car. Can you get another couple of years out of it?
Buy your home, don’t rent. Renting is dead money. You will have absolutely nothing to show for it.
Buy appreciating assets and rent depreciating assets.
Buy luxuries out of the profits of your investments. Never spend the capital.
Protect money from:
- Bureaucrats – tax,
- Bankers – charges,
- Brokers – get a good broker that makes you money, or buy indexes,
- Business – buy products that make you richer not poorer,
- Brides and bueus – prenuptial agreements,
- Brother in law – funeral and estate provisions,
- Barrister – hold assets of value in legal entities.
Using your SURPLUS to increase income and wealth
We move onto what to do with any surplus you have left over after taking care of any expenditure. Your surplus is what’s left over from total income minus total expenditure.
The ideal goal is to invest your surplus income into buying assets that will further increase your income and grow your wealth. You want to free yourself from trading time for money, as with a regular job, by generating and growing passive income instead, which will eventually grow beyond the income you generate from your job, or at least that is the aim.
You have a number of options about what to do with your surplus income, you can either:
- Pay off debt to reduce interest payment costs
- Save the money in a bank account and earn interest on it
- Buy Assets that will increase income and wealth (what I’ve already covered under increasing income also applies here, so check back to see that section again, but I’ve added some other points below)
We have covered paying down debt previously. I’ve included it again here, just to drive the point home. You will generally pay more in debt interest repayments than you’re likely to make earning interest from putting your money in a bank account, so consider paying off loans, and property mortgages with any extra income. Saving on debt interest payments is as good as earning extra money. It’s generally easier to do then finding investment opportunities, so deal with it as a priority.
However if your debt interest payments are say 5% APR per year and you do find an investment opportunity that offers a greater percentage return without much risk, then go for the one with the best ROI, but factor in any potential risk, before going ahead. After all there is no risk to paying off debt.
Saving in a bank account to earn interest
If you put your money into a bank account and leave it there, it will earn interest. The interest rate will depend on the type of account you put it in and freedom of access to it. Generally if you’re happy to leave it and not touch it, you will earn a better interest rate if you lock it away for a few years.
Saving is one of the safest methods of earning money from your money. However at the time of writing this, interest rates are very low, which means interest earned is very low.
Compound interest describes interest that makes interest and exponentially increases income over time if you reinvest it. It really can make an impact over time. Check out the example below.
With a 4% interest rate offered by your bank, and putting £2400 in your account and then leaving it, reinvesting any interest earned, back into the account. Over a 25 year period you would earn £3998 in total interest. This is how compound interest works, you make interest on the previous interest, so it grows every year.
However you have to factor in the cost of inflation when you’re analysing rate of return. Inflation is the increase in the cost of living. Effectively £2400 has much more buying power today than it will have in 25 years time due to the increase in the cost of living. If inflation rises by an average of 2% a year, and the interest you make on your savings is 4%, then in real terms you are only increasing the value of your savings by 2% because inflation is eroding its value over time (4% saving rate minus 2% inflation = 2% savings above inflation)
An asset is anything that puts money in your pocket. either in the way of profit, income, dividends, or as its underlying value increases. Ideally you want to buy appreciating assets when possible, these are assets that rise in value over time, so are worth more when you come to sell them, than you paid for them, although it’s not essential for this to happen.
It’s okay to buy depreciating assets, as long as the return is enough to offset the depreciation loss and provide sufficient profit.
Assets can include:
- Stocks, shares and other investment products
- Property and land
- Equipment/ machinery/ tools
- Intellectual property
- Collectables such as art, antiques, jewellery, vintage cars
Let’s have a closer look at each of these asset classes…
#1- Stocks, shares and other investment products
Buying stocks and shares are generally riskier than just putting your money into a bank account and earning interest on it, because you can lose money as well as gain it. For instance, if you buy 1000 shares at £1 each in X company, and the share price drops to 50p a share, you have lost half your money, however if they go up to £2 a share you have doubled your money if you choose or need to sell them for any reason. You haven’t actually lost anything until you sell, so the price might go down and back up again in time or visa versa.
Shares are generally considered to provide a better rate of return than interest on savings, but you shouldn’t dabble in them unless you know what you’re doing.
There is a lot of misinformation out there with regards to stocks and shares, and I’ve learned the hard way, to be wary about relying on advice given by so-called experts. Just be very wary. It’s a good idea to understand the underlying business and fundamentals of that business and the market it operates in before buying its shares. It is a skill that needs developing. Never invest anything that you’re not willing to lose completely. I’ve recently bought into Indexes, such as the FTSE 100, via a managed fund, with a management fee of 1%. It offer a certain level of diversification compared to single company shares. Tony Robbin’s in his book Unshakeable prescribes this kind of approach, even diversifying across other asset classes.
#2 – Property and land
Usually property and land are amongst the most reliable investment options out there, however make sure you don’t buy when such assets are overpriced. Make your profit when buying. The old adage buy low and sell high applies here.
Location, location, location is a big influence on the cost of land and property. In-demand areas are more expensive than unpopular areas, however a popular area today can be an unpopular one in a few years time, and visa versa, so keep your ear to the ground.
You can consider either commercial or residential property when looking to make such an investment. With property you can buy it to rent out or sell (flip). Some considerations to think about are…
- Buying rundown property and doing it up, can provide a better profit margin, if you can complete the work at less cost than the extra value that is added to the property, because of the work,
- Split the property into smaller units and make greater income than having it as a single dwelling. For instance if you convert a 5 bed property into flats you could make substantially more rent from 5 flats than from 1 house.
- Find desperate sellers that are willing to let the property go cheaper than the market value for a quick sale.
#3 – Businesses
Businesses (online and offline), provide cash flow and income. If it’s a profitable business model your investment can be returned many times. However you should be well versed in understanding and running businesses, before investing a lot of money in one for the first time.
You can consider starting a business from scratch or buying one that’s already established. If you’re looking to buy an established business, you can expect to pay a premium for the privilege. The advantages of buying an established business over starting one up from scratch, is there is likely to already be an established customer base, and the business should be known within its particular market. If it isn’t well established or well known this should be discounted in the purchase price.
Also you should have a steady income available to you from the word go, with a business that has been trading for some time, rather than having to build it up from scratch as you would with a start-up business. When you buy an established business ensure you do your due diligence in assessing its current value and future earnings prospects, before handing over any money, or signing any contracts.
Check out our Ultimate Business Guide for business specific information.
#4 – Equipment/ machinery
Buying machinery that can be used to add value to someone else’s life can provide a nice income for you.
If you buy a car, you can use it as a taxi to make an income, if you buy a camera you can make money from the photographs you take. If you buy a pressure wash you can make money washing driveways or wheelie bins. Don’t neglect the fact that you have to be skilled enough to be able to deliver a good service, comply with the relevant regulations, and market your services, but the possibility of making income is there.
#5 – Skills
Skills are often neglected as an asset class, but they are the secret sauce when it comes to any chance of increasing wealth. You just can’t beat experience, whether good or bad.
If you ensure you learn what can be learned in a purposeful manner from each experience, you will develop skill. Practice, review, tweak, improve your way to increasing your skill. If you want to be a good trader, the only way to really learn is by doing it. Acquire the knowledge you need, and practice it to perfection. Learn to negate risk, and leverage returns.
#6 – Intellectual property
Intellectual property is an intangible asset that is the result of creativity. It includes things like patents and copyrights. If you’re a photographer, you can earn money from the images you take. If you’re a software developer, you can licence your software out to others.
#7 – Collectables such as art, antiques, jewelry and vintage cars
Buying sort-after art, fine antiques or jewelry allowing it to appreciate in value before selling at a profit. Since the market crash in 2008, vintage car prices have soared as the rich have looked to diversify their portfolios. If you had foreseen this happening, you could have been sitting on a fortune.
Some additional tips….
Don’t spend the principle. If you had a million pounds in the bank earning 5% interest, you would gain an income of 50k per year in interest, not bad for doing nothing. If you spend half of the million, that drops down to 25k, still not bad but as you can see, spending the principle severely impacts your income, so keep the principle to safeguard future earnings, unless you can get a better return doing something else with it. However better returns usually come with bigger risks, including losing the lot.
Use debt to leverage returns on an investment (increase % ROI). This is advanced stuff so don’t play if you don’t know what you’re doing.
Long term debt is eroded by inflation over time. £60k is worth much less in 20 years time, and so are the repayments. Think of how house prices have increased over the last thirty years. Something which was a stretch to afford thirty years ago is probably considered cheap now. For instance if you had purchased a detached house 25 years ago you would have paid approx 60k (in the north of England). It would be worth approx 180k today. A profit of 120k in 25 years. That’s a return of £4800 per year, which would have been in excess of any loan repayments (at 4% per annum). So in effect you could have purchased an asset (the house) lived in it for nothing and still pocketed 60k at the end of the 25 years. The alternative would have been to rent and have nothing to show for it.
Buy assets when undervalued or spread buying over multiple purchases (per month) to get an average purchase price (protect against paying too much).
Putting it all together
So when it comes to building wealth you have to find a way to increase your income and lower or minimise your expenditure so that your surplus is maximised. Make your surplus work for you, further increasing your income and wealth in an virtuous cycle by investing and re-investing it in income generating assets. The more you can keep re-investing profits to buy even more income generating assets the better for your wealth accumulation progress.
Stop wasting your money on “stuff” which doesn’t provide any potential to increase your income. You won’t increase your income by buying a new TV, a new dining table, or a video box set of “Breaking Bad”.
Also avoid increasing your liabilities. Buying a new car might make you feel good for a short time, but the regular repayments are going to hit your surplus heavily each month. The same surplus that you could use to further grow your income.
If you tried to sell any of this “stuff”, even just a week after you bought them you would have lost money, and maybe a lot of money. Okay, you can’t stop buying clothes and food, but the more you can save on this”stuff” you don’t really need, the more you will have to invest in income generation assets.
Skills needed for Wealth
Accumulating wealth isn’t an easy task, it’s not so easy holding onto it either. You have to acquire relevant knowledge and develop the necessary skills for acquisition and retention of wealth. There are many examples of people who have won a fortune, from things like the lottery, and lost it just as quickly, simply because they didn’t understand the rules of wealth.
The main technical skills for financial intelligence include:
Financial literacy – the ability to read numbers and understand the underlying meaning of them. You should be able to look at a profit and loss account, and a balance sheet and have some understanding what the figures are telling you about the business and its prospects for the future.
Investment strategy – the science of money making money, which we’ve covered in this guide.
The market – supply and demand dynamics. Why do people get paid more than others, why are some products more expensive than similar alternatives.
The law – awareness of accounting, corporate, state and national rules and regulations, which will impact your wealth accumulation activities.
A combination of these skills are needed to be successful in the pursuit of wealth
Any information found on this website is intended for general guidance only and is not intended to constitute advice to any party. Such information should not be relied on by you or any other party for the purposes of taking any action or decisions. You should consider consulting a qualified financial adviser before undertaking any action.
Wealth and Money Quotes
“The Rich invest their money and spend what is left, the poor spend their money and invest what’s left.” Jim Rohn
“Never spend your money before you have earned it.” —Thomas Jefferson
“It’s good to have money and the things that money can buy, but it’s good, too, to check up once in a while and make sure that you haven’t lost the things that money can’t buy.” —George Lorimer
“There is a gigantic difference between earning a great deal of money and being rich.” —Marlene Dietrich
“Money is usually attracted, not pursued.” —Jim Rohn
“If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.” —Edmund Burke
“A simple fact that is hard to learn is that the time to save money is when you have some.” —Joe Moore
“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” —James W. Frick
“If you would be wealthy, think of saving as well as getting.” —Benjamin Franklin
“Many folks think they aren’t good at earning money, when what they don’t know is how to use it.” —Frank A. Clark
“Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time.” —Johann Wolfgang von Goethe
“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” —Ayn Rand
“Money is a terrible master but an excellent servant.” —P.T. Barnum
“You must gain control over your money or the lack of it will forever control you.” —Dave Ramsey
“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” —Robert Kiyosaki
“The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.” —T.T. Munger
“A wise person should have money in their head, but not in their heart.” —Jonathan Swift
“Money is multiplied in practical value depending on the number of W’s you control in your life: what you do, when you do it, where you do it, and with whom you do it.” —Timothy Ferriss
“The quickest way to double your money is to fold it in half and put it in your back pocket.” —Will Rogers
“Money is a guarantee that we may have what we want in the future. Though we need nothing at the moment it insures the possibility of satisfying a new desire when it arises.” —Aristotle
“Money is the currency of freedom – it buys you time – to find joy.”
“The secret of success is learned by doing.”
Rich Dad Poor Dad by Robert T. Kiyosaki.
Rich Dad Poor Dad, the #1 Personal Finance book of all time, tells the story of Robert Kiyosaki and his two dads–his real father and the father of his best friend, his rich dad–and the ways in which both men shaped his thoughts about money and investing. The book explodes the myth that you need to earn a high income to be rich and explains the difference between working for money and having your money work for you.
The Richest Man in Babylon by George S. Clason.
THE SUCCESS SECRETS OF THE ANCIENTS–AN ASSURED ROAD TO HAPPINESS AND PROSPERITY
Countless readers have been helped by the famous -Babylonian parables, – hailed as the greatest of all inspirational works on the subject of thrift, financial planning, and personal wealth. In language as simple as that found in the Bible, these fascinating and informative stories set you on a sure path to prosperity and its accompanying joys. Acclaimed as a modern-day classic, this celebrated bestseller offers an understanding of–and a solution to–your personal financial problems that will guide you through a lifetime.
Unshakeable by Tony Robbins.
Market corrections are as constant as seasons are in nature. There have been 30 such corrections in the past 30 years, yet there’s never been an action plan for how not only to survive, but thrive through each change in the stock market.
Building upon the principles in Money: Master the Game, Robbins offers the reader specific steps they can implement to protect their investments while maximizing their wealth. It’s a detailed guide designed for investors, articulated in the common-sense, practical manner that the millions of loyal Robbins fans and students have come to expect and rely upon.
Few have navigated the turbulence of the stock market as adeptly and successfully as Tony Robbins. His proven, consistent success over decades makes him singularly qualified to help investors (both seasoned and first-timers alike) preserve and add to their investments.
The Success Classics Collection: Think and Grow Rich and the Science of Getting Rich (Capstone Classics)
Looking for wealth and success? Discover the money–making secrets of Americas millionaires of the 1930s as compiled by Napoleon Hill and distilled into a thirteen step programme to personal success in the 1937 classic Think and Grow Rich. To further prove that the formula for making money is ageless, The Success Classics Collection also includes the 100–year edition of The Science of Getting Rich by Wallace Wattles which explains how to attract wealth, overcome emotional barriers, and apply foolproof methods to bring financial success into your life.