This year marks the passage of three years since the world witnessed the largest economic crisis and viral pandemic that shook the globe. It’s a significant time to reflect on some important observations.
A recent report from Credit Suisse Bank reveals that the number of wealthy individuals in the world has increased by around 5.2 million people who now fall into the millionaire category. On the other hand, the World Bank has announced an increase in the number of the world’s poorest countries for the first time in over 20 years.
Based on these insights and before entering a new year that may bring its own changes, how can we fortify our financial situation? Let’s explore 5 key points in wealth and investment.
1. The Million-Dollar Project is Not Impossible
But it requires a lot of work, effort, and time, and you won’t find a book, advice, or article detailing every step of the journey for you. So, to avoid giving up quickly, start with a valuable and meaningful goal, such as your desire for early retirement, starting a specific charitable venture, or feeling the responsibility to leave your children something that supports their achievements.
After identifying the personal motivation, you can start with any available amount because investment operates on the principle of proportions, and this will multiply your funds more each time.
2. Sound Financial Management Involves Sacrifices
One common misconception is believing that to be financially wealthy, wealth must be evident in your lifestyle, whether through the luxurious house you live in, the modern car you drive, or high-end shoes, clothes, and perfumes.
There is a vast difference between the appearance of wealth and the wealth that requires sacrifices, especially on the road to the first million. For example, instead of buying a new car, look for a used one in good condition, saving thousands in its cost, making financing easier for you.
3. Wealth Requires Proper Investment
Building on the example above and according to the used car you will buy, you can save at a rate of $40,000 or more. Then, when maintaining this car becomes expensive, sell it again and buy another used car.
But the crucial point is how to handle the money you save each time. If you spend it on buying goods and services, you will lose significant opportunities for investment, where you can double the $40,000 to $100,000 or $200,000 over years of proper investment.
4. Proper Investment Requires Study
Some people may spend the amounts they save on buying electronics for the home, new furniture, or perhaps a car for another family member. They may consider it an investment, and it is to some extent, but the flaw in this investment is that the new items they acquire will gradually lose their value, as they are consumable assets.
The secret behind wealth-building investments is investing in assets that will increase in value in the market over time, such as real estate, properties, stocks, certificates of deposit, and savings.
5. Wealth is Multifaceted
Wealth requires conscious spending, smart investment, and the savings that come in between. But this is not all there is to wealth, especially for young people who may feel that the article does not address them and that the road is long before they can invest in expensive real estate or property or any type of high-cost investments.
Here comes the other part of wealth, human wealth, which includes skills, ambitions, and enthusiasm that an individual possesses and plans to work on, with continuous efforts towards cultural and financial awareness.
Finally, let’s not forget time, another type of wealth that we all possess for free. If you manage to employ all these forms of wealth effectively, you are bound to achieve your goals. Follow our articles for more tips that may benefit you on the journey to a million and beyond.