Proverbs 21 vs 20: “There is treasure to be desired and oil in the dwelling of the wise; but a foolish man spendeth it up.”
There have been several books and varying research that I have read in my lifetime about building wealth. In my summation, the Bible gives the full road map on this subject, and all those books are mere derivatives of biblical principles. There are five key foundational truths, and if done properly, one can win and build wealth, regardless of whether you are in your mid-20s or early 50s.
Note, everyone’s income and realities differ throughout life, and as such, some people’s journey for building wealth might be a bit longer. However, you will get there if you employ these key truths consistently. These are as follows:
- Have a written plan for your money – We often hear about creating a budget, but some people still believe it’s so played out and would rather just wing it. We must understand that no one just wins by chance. If you want to build wealth, you must plan for it. And that’s exactly what a budget is; it’s just a written plan for your money. You must sit down monthly, assign every dollar you collect, and stick to the plan. A study by Ramsey Solution, “The National Study of Millionaires,” revealed that 93% of millionaires said they stick to the budgets they create. Getting on a budget is the foundation of any wealth-building plan.
- Get out of Debt – Your most powerful wealth-building tool is your income. If you spend most of your life sending loan payments to banks, loan sharks, and credit card companies, you will, in return, end up with less money to save and invest in your own future. Some persons will, however, argue that a personal bank loan with a 24% interest rate is hardly in the same class as a 7% home mortgage. So instead, they would rather hedge their debt risk portfolio on investments that will give greater returns, that will settle loans, and still make a profit. Whichever is your preference, maximise your savings and investment options as much as possible and take advantage of the low interest rate environment on your debts.
- Live on less than you earn – According to the research done by Ramsey Solutions, 94% of the millionaires studied said they live on less than they make.Most have never carried a credit card balance in their entire lives, spend US$200 or less on restaurants each month, and still shop with coupons even after reaching millionaire status.
- Retirement saving is key from the start of your work life – According to The National Study of Millionaires, 3 out of 4 millionaires (75%) said that regular, consistent investing over a long period of time is the reason for their success. They don’t get distracted by market swings or trendy stocks or get-rich-quick schemes—they actually save money and invest.
- Give abundantly – True financial peace is having the freedom to live and give like no one else. When you write a plan for your money, get rid of debt, live on less than you make, and start investing for the future, you can be as outrageously generous as you want to be and help shape the society around you. Making giving a part of your life doesn’t just change those around you; it changes you. Studies have shown that generosity leads to more happiness, contentment, and a better quality of life. You can’t put a price tag on giving, especially out of a genuine heart.